Thinking of Outsourcing Abroad? You might want to read this first!
Metal fabrication is essential in a wide variety of industries within the United States – including construction, military, telecommunications, lighting, restaurants, retail (point of sale and point of purchase), industrial, medical, dental, agricultural, and chemical sectors – but just because a company is based in the U.S., it doesn’t mean that’s where the metal fabrication occurs. Outsourcing your sheet metal fabrication, tube bending or other metal fabricated parts abroad isn’t always everything it’s cracked up to be, however. Here are some things to consider before outsourcing metal fabrication abroad.
Unless you are outsourcing to a country where English is the primary language, you will need to account for the fact that your contact will understand less English than you think. A nod or smile may seem to mean understanding, but it may mean more about saving face than understanding the requirements. You may placed an order, expecting delivery on time and with the exact material and quality of your US fabricator only to get a different result.
Most U.S. metal fabrication companies have detailed quality plans in effect to ensure the highest possible standards are maintained when they operate. Process engineers create inspection drawings and inspection documentation highlighting all critical dimensions for each step in the process of each part. As processes are performed, each operation undergoes quality inspection to ensure the progressive accuracy of the part. Upon completion of all metal fabrication processes, a comprehensive inspection of the finished part is completed. When you outsource abroad, you have no idea if any quality control will be executed, or what the condition of the factory is where your job will be completed. And because most overseas jobs require that you pay upfront, you could receive a sub-par product and have no way to return it or spend months working out the quality details in order for them to fix the problem.
With all material, there are standards. If you don’t understand the international standard, you may get a different quality than you might expect. Americans have primarily relied on the American Iron and Steel Institute’s (AISI) classification or Society of Automotive Engineers (SAE). Let’s take 304 or Austenitic stainless steel which is a commonly used grade stainless steel. Yes, there are standards for 304 stainless, but that doesn’t mean that it will be made according our standards. For example, a mill using another standard could put more nickel or replace the nickel with other alloys. Also 304 stainless can be referred to A2 outside the US which should not be confused with A2 tool steel, so communication & understand of international standards is a must in order to compare a US product and one purchased abroad.
4. Payment Options
That brings us to payment options. Dealing with a foreign company, there are differences in exchange rates. Also most overseas companies will require that you pay for at least half, if not all, of the services up front before the job is started, or before it is shipped. In the U.S. you can usually get a credit line or be invoiced for payment within terms set up with the company, even if you don’t have the best credit. This not only ensures that you are happy with the product before you pay for it, but it allows you some wiggle room in your cash flow (in other words, you will still have money for operating expenses, not all of your money is going into your product).
When you order metal fabrication from overseas, you’re putting your faith & trust in a company in which you may have little information. You never know what could happen with your product until it arrives. There could be delays in shipments, a shortage of supplies, or problems with customs – the possibilities are endless. You might get one shipment on time, one shipment a month late, and never receive another shipment! When you get your metal fabrication services from within the U.S. you can research or even visit the plant to ensure it is a company you can rely upon to get your order to you on time.
6. Shipping Times
Speaking of on time, if you’re located in the U.S. it’s going to be much quicker to ship product to you from within the U.S. than from overseas. If you have an emergency order, you will definitely get your metal fabrication much faster from a U.S. company than an outsourced company.
7. Total Cost of Ownership
The Total Cost of Ownership factor may be the biggest key in keeping your manufacturing in the United States. You may have travel costs to go abroad to build the relationship. Most likely a larger order will be placed to justify the longer order time and to spread the transportation costs over more parts. Once you receive your product, you will have inventory sitting in a warehouse with no return on your investment until you can sell or ship to your client.
8. Support American Jobs
Last but not least, by supporting a U.S. company, you’re supporting American job growth. Without your business, many jobs could be in danger. Simply said, by “buying American” you can help save jobs and stimulate the struggling economy.