Over the past decade, offshore manufacturing has become a common option utilised by Australian businesses to source labels. At face value, offshore manufacturing offers a cost saving that is tempting to business owners looking to cut down on their labelling spending. However, businesses enticed offshore by cheap prices have discovered that there are downsides and risks to taking your manufacturing beyond Australia's borders. When evaluating whether to choose offshore or onshore manufacturing for your labels, there are a number of factors to consider that go beyond just a quoted price.
Unexpected Delays
One downside to manufacturing labels offshore is the risk of delay due to factors beyond your control. Many developing countries that are popular manufacturing destinations are prone to sudden political unrest, which causes disruption. Issues that seem distant to us in Australia instantly become closer to home when your business is affected - Be it riots, natural disaster, war, or pandemic-related interruptions. Can you afford to run out of labels unexpectedly, or have your supply chain cut off at a moment's notice?
Quality Control
Another downside to offshore manufacturing is the quality of the labels you receive. Maintaining quality control with an international manufacturer can prove challenging. Differences in language, work culture, and availability of materials in the country where the factory is located are all factors that can impact the end product. A delivery of poor quality labels only leads to the need to reprint, which costs you additional time and money. A cheap price can be tempting, but when quality suffers is it really worth it?
Time Barriers
Something else to consider with offshore manufacturing is differing time zones and the challenges that accompany that. Many countries that are destinations for offshore manufacturing will operate at a 5 to 12 hour time difference to that of their clients. When a time-critical task or decision arises, the gap between communications could have major consequences. Your time is a valuable resource, can you afford to wait for a manufacturer’s response as the deadline for needing your labels draws closer?
Increased Inventory Cost
Sourcing your labels from an offshore supplier comes with a longer lead time, which creates the need to order a higher quantity of labels per order to see you through. This results in your working capital being tied up in a large label inventory awaiting use, funds you could be utilising elsewhere in your business. Can you afford to carry a large excess of label stock on hand?
Shipping Cost
Shipping cost is another challenge presented by offshore manufacturing. Given the global supply chain pressure of recent years, international shipping fees are currently at an all time high. Shipping price is something that is out of the control of both buyer and seller, but the risk of high cost can be easily mitigated by keeping manufacturing on shore.
When weighing up offshore manufacturing, it’s important to consider your priorities. If you want a label manufacturer who will work closely with you, can react quickly in the event of an unexpected issue, and deliver your labels fast, working with a manufacturer here in Australia is the ideal option. Your manufacturer will not only be closely accessible from a production, communication and delivery standpoint, but also physically. Meeting face to face and being able to visit the factory to get to know who you’re dealing with is invaluable.
Cohesion Labels is a local Western Australian label manufacturer you can trust. We might be almost 100 years old, but we’re young at heart! As WA’s most experienced label producer, we combine a history that stretches back to 1925 with the industry’s most modern and innovative mindset. If you can imagine it, we’ll make it stick. And if you can’t imagine it, we can do that for you! Get in touch with us for an obligation free quote - We'd love to see how we could make labelling easy for you!