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enero 23, 2018

Should You Procure Equipment From Developing Markets?

Procurement of industrial bakery equipment is often considerably cheaper when made in developing countries. Naturally, the price advantage comes into play due to lower labor costs, cheaper land and materials. It is not a surprise therefore, to see the growing trend of European and American food producers that turn to Asia, China and other developing parts of the world to fulfill their procurement needs.

If you are seeing this trend and considering as well to procure your equipment from a developing country, you may want to stop and reconsider. Here are some of the most common risks associated with buying manufacturing equipment overseas:

Lower Equipment Manufacturing Standards

Despite the tremendous improvement in production standards and quality assurance in developing countries, in general the truth is that other countries have deeply lower standards. Many of these workers do not adhere to close western standards and strict regulation. In an environment NOT closely monitored and regulated, the machinery you receive will be, in many cases, of inferior disposition.

Procurement Can Actually Be More Expensive

The reality is that despite the upfront cost savings, in the long run, the investment can actually turn out to be more costly. While the workers may be cheaper, there are other, less transparent costs. For instance, you might have to pay significantly more to import spare parts from that part of the world. Customer support and technical service time and quality might be significantly longer, and it may be enough to lose just a few days of production capability, to make the investment to be the same value, or even higher.

Limited Secondary Market Value

When buying a new car, everyone knows it is not enough to look on its retail price, it is also important to know if the car will hold its value in a few years when you will want to sell it. While we always hope for the best, there might be situations where you would like to capitalize on the value of your equipment, for instance like using it as collateral for working capital needs. Regardless of the actual quality of manufacturing equipment coming from developing countries, the perception of such equipment is negative and the secondary market for such equipment is very limited, and valuations of such equipment are typically not as generous as those for European and American made equipment.

Increased Risk of Finding a Suitable Supplier

Information availability and reliability is often limited in these parts of the world. You might see a very nice display at a trade show, get a good quotation from the company believed to have manufactured the machine, only to discover that the machine manufacturing process is partially or even completely outsources to an unknown third party provider. Checking carefully the data supplied by the manufacturer is 10 times more critical than

Poor Customer Support

Longer Delivery If you are making your hardware partially way across the mankind, you’re obtainable to have to wait much longer to actually retain those ability. This can cause great problems if you have to adhere to a severe timetable. Even the slightest delay can mention days on to the time it takes to deliver the parts.

No Safety Standards

Health and safeness is a vast priority here, but in other countries health and safeness necessarily to be amended. There are no inspections and no unmitigated checks being contain out. The likelihood of an accident natural event are much higher, and that can cause rigid setbacks. If something occur, everything will have to be shut down.

 

Consider these major mistakes and whether you want the increased risk associated with buying from developing markets. You may just find that spending more right at home, will save you money in the long run.

 

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