Production Offshoring Is no Longer Enough…
Relocating business processes such as production now seems necessary, and allows manufacturers, or their offshore interests, to form new local companies, without it even requiring investment in any production infrastructure or equipment. Yet when all is said and done, the fact remains that a potential threat hovers over and around SMBs in the medium, no to say short, term.
Nowadays, most products we consume are made in Asia. North American businesses are more and more offshoring their production, and even their product development, to that continent. Footwear giant Nike, a ground-breaker on the production relocation front, has already been doing it for several decades. The ensuing ripple effect now has businesses following suit no longer based on choice, but rather owing to the need for production cost control to thwart retail selling price stagnation, and also their competitors’ banking on more sophisticated and expensive marketing and brand-image strategies to engulf the market.
Daniel Thibault, Business Development Manager at Skerpa Design inc., a Montreal-based industrial design firm, believes that from now on, Asians with a nose for good deals, especially Chinese industrialists, will increasingly seek to contact product distribution and retail store chains directly rather than do business with SMBs that outsource their manufacturing production in China, what with the Internet’s growing popularity undeniably promoting this trend. In addition, the majority of a given industry’s players are already sourcing in China; so just as soon as this drift begins gathering momentum, local business owners will hold fewer and fewer advantages and be forced to find ways to avert the problem quickly in the short term. There are limits to offering competitive prices when you know that sometimes, a manufacturing plant can be making the same products for two competitors, each with its own distinct logo, and furthermore under the same roof!
Industrial Designers Are Value-Added Product Developers.
Industrial designers are value-added product developers who can generate a major ROI. Industrial design consists, in particular, in establishing intimate links among structure, materials, color, finish, form and function, while bearing in mind and achieving a balance with the products aesthetics, ergonomics, safety and commercial attractiveness, as well as users’ needs and expectations plus production and distribution conditions. Depending on the mandate, the industrial designer may be called on to manage the entrusted products whole development cycle, and even sometimes recommend manufacturers for production. New product marketing also entails teamwork with sales and marketing personnel.
Furthermore, the current trend of protecting the environment in developing new products increasingly regards the environmental soundness factor as a high priority. Although there are those who still downplay this aspect as just a fad, one thing remains for sure: business opportunities are highly interesting, but there is also an urgent need for reviewing and calling back into question certain methods and processes. Contrarily to what many would care to think, well-conceived eco-friendly items can prove to be profitable not only to users, but also any business dedicated to maintaining a brand image and a reputation as a worthy, self-respecting corporate citizen… The best ideas often emerge upstream, and that is where industrial designers most effectively come into play: in close ties with their employers or clients. In another respect, we have to wonder exactly how and to what extent those innumerable low-production-cost consumer items impact on the proliferation of allergies, cancers and other diseases, disorders and illnesses that affect us all…
Conflicting interests must sooner or later be balanced. In spite of market globalization, we must remember that cultural differences between countries can act as customs entry barriers, even against Asian exporters. At the same time, SMBs, well beyond cost-driven development and production offshoring, can no longer decide in favor of “cautiousness” by limiting R & D costs related to original, innovative products and considering these costs mere “expenses”. Spending in the right places provides not only proof of greater alertness and dedication, but also an investment in the business’s survival and prosperity.
We must look beyond the horizon with care, conscientiousness and insight before deciding to lock the door forever on a production or assembly line, for in the medium term, such expertise and know-how vanish away. Moreover, we must also keep in mind that maintaining local ancillary equipment for production purposes can enable to offer shorter delivery lead times as well as inter-seasonal delivery, neither of which can be realistically achieved through Asian-based manufacturing. In fact, some manufacturing concerns are currently trying to turn things around by re-opening their former production facilities or simply buying local plants on the wane.
Finally, in a consumer market more and more saturated with multiple product offers from numerous businesses coupled with seemingly ever-shorter product life cycles, failing to invest in research on new products due to be marketed can prove to be risky business. Plentiful creativity and dynamic initiative have become top priorities in this early 21st century.