| One company that staunchly opposes offshore | | | | These soft costs include additional personnel to |
| outsourcing is Hesperia, California, based Mer-Mar; | | | | monitor operations in foreign factories; time and money |
| oddly enough, Mer-Mar is a contract manufacturing | | | | associated with shipping and customs inspections; |
| and assembly company and is, by definition, an | | | | costs to rework faulty products; the lack of easily |
| outsource manufacturer. With over 30 years | | | | accessible spares, and the challenges of working in a |
| experience specializing in circuit board assembly, | | | | foreign country including communication challenges, |
| Mer-Mar is an outsource provider to other businesses | | | | low-skilled workforce, unfamiliar laws and regulations, |
| that do not consider circuit board assembly a core | | | | and infrastructure constraints. Mer-Mar believes these |
| competency and/or do not wish to invest their | | | | additional soft costs frequently exceed the promised |
| resources in their manufacture. | | | | hard cost savings that initially lure the company |
| The company assembles circuit boards for the | | | | offshore. |
| medical electronics, aerospace, automotive, | | | | Mer-Mar agrees that some lower-level technology or |
| entertainment and leisure, and homeland security | | | | lower-end priced products may be outsourced |
| industries. Mer-Mar is an ISO-9001 certified company | | | | offshore, highly complex assembly, and/or products for |
| consisting of 50 highly skilled employees who abide by | | | | which price is not a major obstacle, often remains in |
| industrial quality standards. The company is a regional | | | | the United States. But, customers that rely on high |
| service provider and supplier delivering high quality | | | | quality, advanced technology, and skilled labor will need |
| manufacturing primarily in the southwest United States. | | | | to keep their assembly manufacturers close to home. |
| As an end service provider, Mer-Mar does not | | | | For example, customers requiring circuit board |
| outsource offshore. The company’s leadership also | | | | assemblies for critical care medical equipment may not |
| has a fundamental philosophy that views offshore | | | | be comfortable with the risk level that offshore |
| outsourcing as impractical for their customers, which | | | | outsourcing firms represent. Instead, they may depend |
| are in industries with high quality standards and | | | | on local contract manufacturers such as Mer-Mar to |
| just-in-time delivery requirements. While some of its | | | | do the job. Mer-Mar’s focus is on those customers |
| larger competitors have commenced offshore | | | | in specific industries where the need for reliability, |
| outsourcing of various services, Mer-Mar has resisted. | | | | accessibility, and repeatability outweigh the cost |
| Mer-Mar’s customers rely upon the quality of the | | | | advantages of going offshore. |
| products, history of dedicated customer service, and | | | | Management at Mer-Mar does acknowledge that it |
| dependability of receiving orders when promised. | | | | makes sense for high volume consumer goods, such |
| Mer-Mar is also frequently asked to quickly complete | | | | as low-level electronics including toys and video |
| orders for customers within a matter of days. In order | | | | games, to be outsourced offshore. In these cases, the |
| to be flexible and responsive to its customers’ | | | | cost savings are frequently realized, despite the |
| requests and to provide adequate support, Mer-Mar is | | | | rework and failure rates of these types of products. |
| required to remain close to its customers and its | | | | The also believe it is acceptable to offshore outsource |
| suppliers to keep its supply chain accessible and lead | | | | services when the talent cannot be found domestically. |
| times brief. Each of these characteristics is perceived | | | | In these situations, a company has no other alternative |
| to be vital to Mer-Mar’s success and would be | | | | but to outsource. |
| compromised if Mer-Mar were to outsource its | | | | Yet, offshore outsourcing is not an option for Mer-Mar. |
| manufacturing operations offshore. | | | | However, due to Mer-Mar’s niche market |
| Despite Mer-Mar’s favorable reputation, several | | | | positioning and reputation for excellence in assembling |
| customers have recently outsourced their circuit board | | | | highly technological and advanced circuit boards, |
| assembly operations offshore. As with other industries, | | | | customers continue to rely upon them for these |
| the attraction to offshore outsourcing is the promised | | | | services. With its plant located in the lower-cost, high |
| cost savings. However, Mer-Mar cautions that many | | | | desert community of Hesperia, and its focus on quality, |
| companies fail to recognize the increased soft costs | | | | reliability, and offering service to its customers, |
| frequently associated with offshore outsourcing. | | | | Mer-Mar continues to maintain its competitive edge. |