It should go without saying that international product manufacturing costs are key for nearly all companies that manufacture in or secure their products from a foreign country. Most companies that manufacture in China would love to move their manufacturing out of China. But doing so is difficult for nearly all, and impossible for many. Product manufacturing costs are a huge factor in choosing a location for product manufacturing or outsourcing.  Over the last year, I have had probably more conversations about where companies should manufacture their products than in the prior five years combined. And those conversations have reminded me that many companies have too narrow a definition of product costs.

How to Lock in Product Prices with Overseas Manufacturers to avoid NOT getting your products when you need them most. The three key issues in nearly all the contract manufacturing agreements we draft (be they for China, Vietnam, Pakistan, Mexico, Thailand, Malaysia, Indonesia or wherever) are 1) price, 2) quantity and 3) delivery date. Yet many product buyers that have their products manufactured overseas focus so much on issues like intellectual property protection and control of molds, that they neglect these three key issues.

Moving manufacturing from China to Mexico or Poland will help the world by reducing energy consumption and pollution. Sourcing products from China has all sorts of hidden costs. This post focuses on the environmental costs. I my next post, I will discuss various other "hidden costs" that come from China sourcing, beyond just the environmental ones.