Mechanical Engineering

Mechanical Engineering, characterised by many mid-sized companies, is the backbone of the German industry. While big corporations normally have reduced their competitive disadvantages by a relocation of production abroad, this tendency is not typical for mid-sized companies.

There are good reasons for this. On one hand, mid-sized companies have only limited human and financial resources and on the other hand, the risk of a relocation of produc- tion should not be underestimated. Often the costs are higher and the benefits are less than expected.

The reasons are high expenses for negotiations and contract conclusions, fraud, and high start-up and training costs. Even after the start-up phase, there is very often support necessary in order to reach and maintain the required quality, leading to high personnel costs and travel expenses. A common mistake is to ignore the control effort to prevent misappropriation and theft. Common is also to underestimate the loss of flexibility due to long distances which affects the processing of rush orders, the companies are used to.

Considering these risks, mid-sized companies should examine a relocation of production very carefully. This is especially because many of them have not realised all potential increases in productivity and cost reductions.

We look forward to supporting you finding the appropriate strategy for your business.

Please contact us.