What is the true cost of a low-cost product? When evaluating offshore supply chains and production, this almost too-simple question can lead to a complicated range of answers. The longstanding promise of offshoring has always been lower prices for comparable (if not equal) products. But what are the hidden costs of these lower costs?
The exacting standards in infrastructure, construction and manufacturing are built around safety and avoiding failure, which means almost every item in a supply chain is a valuable purchase decision. And buying the wrong bolt from the wrong vendor to save pennies can often lead to quality problems that cost more than a few bucks.
Pairing this reality with a climate of economic uncertainty plus increasing logistics and supply-chain disruptions and bringing “small” purchases to domestic vendors can give a business new advantages for efficiency and quality.
Let’s explore smartshoring, the strategic blending of high-impact domestic purchases with selective offshoring, and how a balanced and diversified supply chain can provide more resilience and help you rethink the actual cost of lower cost.
Shoring Up Reliable Costs
In our modern economy, “offshore” has historically meant “lower price.” The U.S. dollar is the world’s reserve currency, and as such, labor overseas is almost always going to be less expensive. This means products requiring more labor-intensive manufacturing or manual processes will cost less when manufactured abroad.
But with simpler products that call for less labor, the difference between domestic and offshore pricing shrinks considerably. When tariffs go up and economies fluctuate, that margin narrows even further, and suddenly bolts made from high-quality U.S. steel are in the same price bracket as their overseas competitors.
Offshore sourcing also requires businesses to calculate freight, delivery and warehousing, because buyers offset the high cost of delivery with bulk orders. In an era of economic uncertainty, these cost-saving measures now take on their own hidden costs – disruptions, accidents and layers of complexity add up to a supply chain that is dependent on variables out of your control.
Price uncertainty becomes a cost, but one you can offset with smartshoring. When your vendor is in your time zone, you don’t have to order in bulk and warehouse it. While tariffs can cause dramatic and unexpected swings in pricing, your U.S. manufacturer can keep your budget steady and provide cost certainty.
Working with a partner who can identify the fasteners on a project with competitive domestic pricing enables you to stay on budget while realizing a host of other benefits associated with domestic manufacturing, including improved quality and lead times.
Logistics and Supply: The Hidden Costs of Offshoring
Ask any builder if anything they’ve ever built has gone exactly to plan, and you’ll likely get a laugh. Contractors manage projects, but they also manage uncertainty.
And global supply chains can fluctuate on a whim, but your project site still needs bolts. Raw material shortages happen. Port delays happen. No one gets into infrastructure or construction to think about geopolitics, but our global economy and offshore supply chains lead to geopolitics affecting our construction timelines regardless.
Smartshoring domestic fasteners means shoring up your business against logistical uncertainty. You can solve problems quicker through one-on-one relationships with vendors who pick up the phone when you call.
When you don’t order in bulk, you don’t risk a bad batch that leads to costly delays. And if you get the wrong part or something isn’t correct, a domestic vendor and quicker delivery means you’re back to work much sooner.
No one wants downtime on a construction site, which is why businesses are turning to smartshoring to lock in shorter lead times and faster deliveries on essential components. It’s time to consider what materials you might bring domestic at a minimal cost to keep the smallest 1% of your project from holding up the other 99%.
Quality: Settling for Less Is Settling for Less
We’ve all passed on top-shelf quality at one point, whether we’re talking work boots, car purchases or boxed macaroni and cheese. Sometimes cheaper is fine, as with the pasta, but it really isn’t great when a budget trash bag fails as you’re carrying it out to the bin.
Smartshoring is the surest way to safeguard your peace of mind for the duration and outcome of your projects. Many American-made products are subject to higher standards, and studies show that U.S. steel has an 85% pass rate. Domestic fasteners are even required by law for many public infrastructure projects. Are you willing to take the chances with offshore steel that nuclear power plants refuse?
Domestic fastener suppliers like Birmingham Fastener put everything they produce through accredited testing labs and adhere to ASTM standards. And local oversight means businesses (and you) are monitoring production more closely. If something is off, it can be corrected quickly, which is the mark of quality.
Smartshoring fasteners isn’t just about compliance — it’s about the nuts and bolts of safety. Equipment and infrastructure failures can’t be predicted, but they can be insured against by improving your standards. The minimal price difference of many domestic items like fasteners makes smartshoring the easiest way to upgrade your entire project’s quality with the least cost output.
It’s like the budget trash bag: If you aren’t thinking about fastener quality now, you might find yourself worried about fastener quality later.
Partner With Birmingham and B-Shore
Smartshoring as a concept is not new or exclusive to a single company. It simply represents a strategic approach to blending domestic and offshore sourcing. Over the years, however, we’ve developed and refined our own brand of smartshoring to provide maximum impact and value.
It’s called B-Shore.
B-Shore is about more than price. It’s about creating certainty: The certainty that your fasteners are covered. Combining our unique expertise, commitment, capabilities, and coast-to-coast footprint, with our tailored approach you can B-Shore of quality, cost, timelines and service.
Leveraging our deep expertise and vast capabilities, we have the ability to review your project and identify which fasteners can be manufactured domestically. If today’s economic climate has you feeling uncertain about your fastener supply, partner with Birmingham and B-Shore.
Shore up a domestic supply of fasteners. Our extensive inventory and high-touch service ensure you’ll get the high-quality bolts you need, shipped fast and on time. Call us or get a quote online today.
06/4/2020
