The Top 10 Reasons to Buy American
The Added Costs of Sourcing Die Castings Offshore
1. Risk of Market Share Companies will create competitors for their die casting products by going overseas. Your confidential files could fall into the wrong hands and could be released to your competitors, giving them access to your proprietary product specifications, specialized tooling information, or marketing information.
2. Technology at Risk Protect your technology! Some offshore suppliers will sell your technology secrets to your competitors here at home and abroad!
3. Miscommunication Miscommunication can result in added costs. Differences in language and culture – not to mention the hassle of dealing with other time zones – can prevent suppliers from implementing correct die design changes or assuring their proper implementation. Miscommunication can also delay your products from getting to market on time.
4. Long Lead Times A constant problem with offshore outsourcing is that production delays are fairly common. Overseas suppliers are usually less flexible than domestic suppliers, and if demand for your products should suddenly increase or decrease, you could end up paying for it either way. The fact is, it is virtually impossible to have short term cancellations with offshore suppliers.
5. Shorter Tool Life Diecast die steel that goes untreated or is uncertified will have a much shorter tool life. Sometimes, the reason the price of a die or mold is so low is because the manufacturer is unwilling to guarantee the tool life of the die cast. What was supposed to be cheaper will instead end up costing a lot more due to a premature die failure.
6. Product Failure There is a higher risk of product failure with offshore die casting companies. While they may offer lower prices, it could end up costing you much more later because of a low quality a die cast product. Offshore suppliers may have lower prices due to the fact they use off spec metal alloys that are uncertified. This equates to a higher risk of product failure, which can also cause degrading or breakage when such components are incorporated into your products.
7. Paying Before Approving Products Most offshore die casting companies require advance payment – even before you review shipment quality or quantity.
8. False Certification Claims Many offshore die casting companies will claim they are ISO certified when they are not, simply because their country of origin does not prosecute or try to prevent fraudulent business practices.
9. Unknown Production Standards What standards is your offshore supplier using for production and inspection? Die Casting companies in America adhere to the standards established and approved by the North American Die Casting Association (NADCA). Offshore die casting companies most likely do not. This makes it difficult to determine if the die casting parts you are getting are really certified or – in some cases – toxic!
10. Rising Inflation and Falling Exchange Rates In many countries, the currency exchange rate is no longer as favorable as it was just five years ago, and many nations are experiencing ever-rising inflation. As a result, U.S. die casters are more price competitive than ever before.
Offshore Die Casting Horror Stories
A West Coast computer printer manufacturer selected a Taiwanese company to produce their die castings because their quote was 50 percent lower than a domestic supplier’s. As it turned out, however, the Taiwanese company reported several problems with the die casting die, which resulted in a 12 month delay in producing parts. When the Taiwanese tooling was finally approved, new part prices were quoted at 42% higher than originally agreed upon. With all the added costs of doing business overseas, the printer company admitted it would have been far cheaper to hire a domestic die casting company in the first place.
A manufacturer of power saws and snow blowers thought it would be cheaper to use an overseas die casting supplier and aggressively sought out a “less expensive die casting company.” Unfortunately, the manufacturer discovered several issues with their die cast tooling (including poor design and workmanship), which eventually required extensive welding on die cores and other major tooling repairs. What was supposed to be a cheaper solution has since become an expensive headache. The manufacturer has serious concerns about the die cast tool life, and the purchasing agent is not at all optimistic.
A Midwest manufacturer of small appliances was attracted to an offshore die casting toolmaker that offered shorter tool manufacturing time. Seeking a competitive edge over their competitors, the manufacturer quickly hired the company. As it turned out, however, design changes were required for new components, and what was supposed to be a shorter tool manufacturing time, instead resulted in long delays due to miscommunication over the revisions. Not only did the manufacturer lose time by going with the offshore company, they ended up paying more money than if they had hired a domestic die casting company to begin with.
A domestic hardware supplier that hired a Taiwanese die casting company to cast their zinc refrigerator door handles was sued by a manufacturer of restaurant kitchen equipment because the door handles produced by the overseas company “pulled right off the units.” In fact, the door handles were so poorly designed that they couldn’t be replaced, and the entire door had to be replaced instead. The domestic hardware supplier refused to cover the cost of the door handles and other expenses and was subsequently sued by their client. The hardware supplier sees itself as a victim, and has been unable to recoup its losses from the Taiwanese company. As a result, all relationships have been severed and no one has turned out a winner.
These are true stories reported by NADCA.