In this week’s Economist, there is a special report about off-shoring manufacturing. This report was right on topic for us at E&P, as many potential partners, advisors, or even interested friends ask why we’re planning to make our jeans in the USA instead of abroad. Won’t it be much more expensive to off-shore? Shouldn’t we make our jeans in India?
The answer is that it’s unclear that offshoring would be much cheaper in the end. Many companies, especially those with short innovation cycles like us, may find it worthwhile to produce closer to the end consumers to best meet their needs and changing tests. The best example of this strategy is Zara (mentioned in this article), which manufactures in Spain to be extraordinarily responsive to trends. Take a look and let us know what you think!