Tool takes dispassionate look at offshoring

Too many businesses rush into offshoring because they think it is the most cost effective way to maintain their competitiveness, but this is not always the case, says the MAS.

Manufacturers looking to relocate their business processes abroad in order to save money are being asked to think again, with a new offshoring decision support tool produced by the Manufacturing Foundation in partnership with the Manufacturing Advisory Service (MAS).

Recent years have seen a growing number of businesses relocating their manufacturing processes to foreign locations, lured by the lower cost of operations and the prospect of a greater competitive position.

But with 25% of offshore projects failing, MAS is now warning that the decision is far more complex than it first appears.

"Offshore? Be sure!" was launched at MACH 2006, following concerns that a lack of information and insufficient consideration has led to costly decisions being made in industry.

MAS and the Manufacturing Foundation funded by Advantage West Midlands commissioned KPMG, one of the leading independent advisory providers, to produce the practical and constructive guide to help businesses consider the wider implications of moving offshore.

With its focus on India and China as the most influential developing countries, "Offshore? Be sure!" aims to show companies that there is a lot more to consider than cheaper labour rates.

It stresses that they also need to give due consideration to the total acquisition cost, inherent supply risks and the potential impact on their remaining UK business.

MAS Specialist Huw Jenkins, commented: "Too many businesses rush into offshoring because they think it is the most cost effective way to maintain their competitiveness, but this is not always the case".

"It is vital that manufacturers take into account all of the potential risks involved".

"This useful offshoring support tool will help businesses make an informed decision before taking such a significant step".

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