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| Image: projettime.com |
Does your business understand risk versus return?
Incorrectly, some company make decisions predominantly on price.
What is often not understood are all the risks and myriad of hidden costs associated with the entire process of importing, particularly when the product is a high value asset or safety critical.
The risk most focussed on is the exchange rate. This is easily identified as it has a direct and immediate impact. Unfortunately, when the global economy experiences a crisis, the exchange rate hit can become even more volatile and costly than in normal trading periods.
What many importers often fail to fully understand are the hidden costs. Some of these costs are:
The risk of non-compliance with relevant standards, safety and design rules together with the wide-ranging impact that poor quality has throughout their business.
If a product failure was to occur, resulting in injury or even death, company directors and employees are personally liable for criminal penalties.
Importing poor quality products has a direct impact on productivity, profit and brand reputation.
Lengthy time delays and the costs associated with reworking errors or writing off non-complying rejects.
Time lost on communication difficulties with Asian suppliers including design or specification issues and misinterpretations.
Having additional local quality inspection processes to compensate is costly and time consuming.
Can your business control the international geopolitical landscape?
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