It is critical that offshoring decisions be made while accounting for total cost. Offshoring typically lowers labor and fixed costs but increases risk, freight costs, and working capital. Before...

It is critical that offshoring decisions be made while accounting for total cost. Offshoring typically lowers labor and fixed costs but increases risk, freight costs, and working capital. Before offshoring, product design and process design should be carefully evaluated to identify steps that may lower freight content and the need for working capital. Including an onshore option can lower the cost associated with covering risk from an offshore facility.