Report Says Offshore Sourcing May Add to Die Casting Expenses
Aug 19, 2004
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Unexpected costs often drive up the final price of die-cast products by as much as 20 percent for manufacturers and OEMs that use offshore sourcing, according to a study conducted by the North American Die Casting Association (NADCA) in conjunction with the U. S. Department of Commerce.
The report, called the "Hidden Costs of Offshore Sourcing," lists the top seven ways offshore sourcing of die casting can result in higher than expected costs and offers examples to illustrate some of the issues U.S. companies face when they do not work with North American die casters.
Among the reasons for these unexpected costs are miscommunication, long lead times, the price of die failure, legal liabilities, and payment for products sight unseen. The study also notes that market share and technology may be put at risk because of unscrupulous offshore die casters passing along trade secrets, specifications and marketing information.
"Many unsuspecting North American manufacturers and OEMs have been lured by visions of low prices for offshore die casting," said Daniel L. Twarog, NADCA president. "Unfortunately, many of them have learned there's a bigger price to pay when their suppliers become competitors by copying designs or technological breakthroughs."
According to NADCA, many manufacturers are discovering that there are very good reasons for choosing North American die casters, including innovation, integrity, accessibility, and reliability. "Choosing North American suppliers not only provides quality and value with your die casting, but it helps safeguard the investment made in designing a product," Mr. Twarog noted.
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