Manufacturers trying to decide where to locate a facility, and not only in Mexico or China, need to take several costs into account, advises The Offshore Group, Tucson, Ariz. Here's its list:
- The cost of intellectual property.
- The cost of additional inventory of goods in transit over long distances.
- The cost of additional safety stocks to ensure uninterrupted supply.
- The cost of warranty claims.
- The cost of engineer visits or resident engineers.
- The cost of senior executive visits to set up operations and relationships with suppliers and managers.
- The cost of out-of-stocks and lost sales caused by long lead times.