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November 2015 • SMT Magazine 67 raw material can be imported and this drives the need for frequent reconciliation between forecast and actual consumption. For example, in China, contractors often require clients to purchase unused inventory quarterly, since otherwise this unused inven- tory would count against import quotas. Typi- cally, this type of reconciliation occurs far less frequently at U.S. contractors. In many cases, minimum buy inventory or excess inventory driven by changes in demand is carried by U.S. contractors until the inventory becomes inac- tive. Customs documentation related to prod- ucts imported back into the U.S. can also create issues. For example, required country of manu- facture labeling may change a product's image in the minds of the consumer, or in the case of large corporate customers, drive demands for unit price reductions that eliminate any savings achieved by moving the product offshore. A country's lack of infrastructure and secu- rity can also cause surprises. For example, roads in Mexico are not uniformly well maintained. Truck transport on long stretches of rough road can create product damage. Areas where trucks have been frequently hijacked may have high insurance premiums. The end result can be costs much higher than previously anticipated. Quality As mentioned earlier, equipment costs are the same in just about every country. Conse- quently, contractors in countries with lower labor costs tend to minimize equipment invest- ments wherever possible. The end result can be processes which are automated in the U.S. to minimize labor cost are done manually in countries with labor costs that are lower than the cost of automation. This can impact quality, since manual operations are not as consistent as an automated process. Staff Support Time This may be the largest uncalculated cost of working offshore. Few OEMs tell their engineer- ing or program management staffs to work the mADe IN USA AND ToTAL CoST: SIx WAyS U.S. SoUrCING SAveS moNey arTIcLe figure 2: an automated selective solder process is used on mixed technology pcbas with minimal through-hole components.