Are you looking for increased turnaround on projects while improving your bottom line? Then it’s time to think about outsourcing engineering work.
The Changes Within Chinese Manufacturing
While trade relations have become a heated topic of conversation due to the recent hostility between United States and China, it’s barely a new phenomenon. In 2014, the Boston Consulting Group found that rising labor cost and flagging productivity had made once low-cost countries like Brazil and Russia far less attractive than they had been before. Even China which had once been an oasis of low-cost began to grow into a pricey headache for many supply chain managers in the United States. It wasn’t just rising costs that American businesses had to deal with. They also had to deal with reputational problems like forced labor or intellectual property theft. Since 2010, many businesses have noted these changes and the number of manufacturers that have decided to reshore their operations has increased 10 times over. Lately, companies have begun looking towards other Southeast Asian countries for an affordable alternative to China. According to the American Chamber of Commerce in China, a quarter of the companies currently operating out of China are heavily considering their other options like Thailand and Vietnam.
While there have been multiple overnight shifts in this trade war, the “Made in China” era won’t go down so easily. The transition out of China is a critical process that must be carefully considered and reviewed before jumping into. Some companies have worked with the same manufacturer for decades and transferring that knowledge used to create efficient production can be tough. This can be exceptionally challenging for electronic companies with complex or complicated products. Regardless of industry or how complex production is, companies also need to take into account the local teams they’ve already established in China.
How to Succeed in Transitioning Production Out of China
New regulations have created further complications when it comes to transitioning out of China. To avoid extra charges, companies need to meet specifics requirements. For instance, a company in Singapore of Indonesia may prove a full tariff if specific materials originate from a facilities in China. Combined with the cost of establishing a new manufacturing process somewhere, these charges and fee can pile up and can damage susceptible companies. Before fully committing to the transition process, companies must a comprehensive assessment of their sourcing strategies and existing relationships, as well as a complete list of materials used for each products to check against current tariff specification. Only then can a company truly ascertain whether transitioning is the most cost-effective step forwards for them. The policies of international trade are now changing faster than anyone could have imagined and it safe to say that no one can tell what President Trump of Xi’s next move will be in this trade war. Today’s best practices might not be here to stay and todays partners could become tomorrows combatants. Supply Chain Managers should try to stay in tune with the different geopolitical tensions and do the best they can to help reinforce flexibility.
Finding skilled design engineers and other talent has been an increasingly hard task that many manufacturing companies are struggling with. According to a study done by Workable.com, engineering jobs are the hardest jobs to fill and on average take the longest to fill, taking 62 days for engineering jobs and only 47 days for other jobs. Because design engineers are in short supply, this time can be drastically higher for the manufacturing industry.
After looking at the facts, it makes sense why the data from ThomasNet.com is showing a growing number of companies are looking towards third-party engineering service companies to outsource their design work. The talent offered by most turnkey service companies is more often then not very reliable, however at some point our government leaders and US manufacturing companies are going to have to get together to address this growing problem facing the industry.
A short-term solution to this growing issue would be the support and advancement of apprenticeships and tradeschool, however a more long-term solution would require more work. Since most engineering jobs require a college degree, we need to focus on High school student to try and encourage them to pursue degrees in engineering by offering them incentive and opportunities to reach for these high paying, rewarding jobs. If we can attract more young people, especially more girls to these engineering fields than we would be able to fill those jobs a lot faster.
Below are the top ten service categories according to ThomasNet.com
The manufacturing industry business conditions continue to improve and the outlook remains positive. US Manufacturing reports from March show increased factory activity for the fifth straight month with factories expanding despite a strong U.S. dollar, which makes American products more expensive in overseas markets. They also have recovered from big cutbacks in the energy industry, which reflected low oil prices. Factory orders were up 5.5 percent from a year ago with total shipments of manufactured goods increased 0.2 percent after surging 2.5 percent in December. Manufacturing, which accounts for about 12 percent of the U.S. economy, is regaining its footing after being buffeted by lower oil prices and a strong dollar. The truly successful companies know that to be successful, outsourcing deployments require finding the right partner. Enser’s extensive experience as a leading engineering services company uniquely positions us to provide the best and most cost-effective solutions. ENSER can provide integrated solutions from the best tooling solutions and custom developed equipment & machines, to test and measurement devices, to prototyping, component and part fabrication, we deliver cost effective solutions reliably.
Custom Machine, Tooling and Build Services
- Enser brings leading reliability in both Custom Design and Build to Print services to increased factory activity.
- From our experience we have developed a completely USA based fabrication program that takes the unknown out of off-shore manufacturing.
- Using our Quality Process to increase factory activity that has been developed over the past 70 years, we enable our customers to meet their “time to market schedules”
- We utilize local staff to provide a constant interface to our clients and ensure our manufacturing and quality team clearly understands the requirements and scope of the engagement.
Services offered out of our Engineering and Technology Development Centers include:
- Systems Engineering
- Design validation
- Software & Controls Development
- Tooling and Fixtures
- Test Systems
- System test and Debug
- From the Engineering and Design of your product to the manufacturing, tooling and testing, to supporting your process engineering, Enser can deliver superior cutting-edge solutions to increased factory activity. Since 1947, Enser’s reputation has been built on the quality of service and firmly believe long-term customer satisfaction is the cornerstone of our success. Call us today (877) 367-3770 to schedule a visit to discuss the options available for your specific needs.