Mar
14
Offshore productions benefit
Filed Under Uncategorized
The benefit of Offshore production:
Offshore Production involves with relocation of physical manufacturing location or processes to a cost effective (LOW COST) destination(S). Examples of production offshoring include the manufacture components in Taiwan (World Leading Technologies in Taiwan: Semiconductor Manufacturing, Biotechnology, Bicycle Building), production of apparelS, toys, and consumer goods, cosmetics, textiles in China, Vietnam etc.
Production offshoring got its biggest push when the NAFTA (The North American Free Trade Agreement [Spanish: Tratado de Libre Comercio de América del Norte]made it easier for US manufacturers to shift production department from the US to Mexico. This offshore trend is keep shifting country to country, which offered cheap prices. Offshore production is happen where low wage rates, no labor laws, cheap loans, less environmental regulations, and huge economies of scale based on area where million workers dedicated to producing a single line of product.
Product design, research and the development process are relatively difficult to offshore because research and development to improve products and create new reference designs requires a skill set + lots of communication and testing. For this reason only the manufacturing happen to be offshored by the companies wishing to reduce their costs.
