Does Asian outsourcing still make sense?

Before I get to my topic today a reader wanted to know when I was last in China and am I still focused on outsourcing. My last trip to Asia was in late January and into early February. And my consulting focus is helping companies figure out the what, when and where of outsourcing.

In the current economy, outsourcing to Asia may or may not make sense. I have recently helped a company re-patriot some product because Asia did not really fit their needs. There are many U.S. companies that are hungry for work and their pricing reflects this. There is also a big push for companies that outsource to bring those items back into their manufacturing site until the economy turns.

There are many thoughts about outsourcing to other countries both positive and negative, but bottom line you as a supply chain expert or business executive or owner have to determine what your needs are and find the best solution and build your supply chain strategy around it.  That strategy should include looking at both domestic and foreign sourcing. If you don’t have all the facts you can not make good decisions. What I have typically found is that a mix of domestic/ global sourcing is what works well. I would say the biggest fault I have found is that companies get overzealous and either don’t put anything outside the U.S. or they put everything. While I understand some circumstances that drive this, most circumstances don’t call for it.

There are a couple of times where your supplier or outsourcing partner should be close.
1. If you are prototyping or in the very beginning of a product’s lifecycle and you are anticipating many changes.
2. If your quality and supply chain teams are small and cannot travel.
3. If you need lower cost quick turn capability or leadtimes are short.

If any or all of this is true, you should probably stay domestic, otherwise get educated what the world has to offer.  

In short Asia is still very viable, but regardless of  the current state of economy you have many choices locally.

Let me know your thoughts or discussion topics you might have by commenting below.