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  • The High Cost of Regulatory Compliance with International Manufacturing
     

    When purchasing products from overseas, there are many costs that businesses tend to overlook. Included in these unforeseen costs are the costs associated with basic compliance of regulations specific to the country the supplier is located in. The Department of Commerce’s “Asset Cost Everywhere” site discusses in-depth the costs of utilizing an international supplier - specifically, the high cost of complying with foreign regulations for doing business.

    This blog is the fifth in a series detailing the costs associated with international suppliers. Read more: 

     

    There are two areas of regulatory compliance that companies sourcing overseas should be prepared to encounter: One, miscellaneous foreign business relations, and two, U.S. laws related to importing goods.
     

    Costs of Complying with Foreign Regulations

    Companies that operate overseas must comply with the regulations set by the country in which they do business. These regulations are not static, and are subject to change over time, across borders and at the whim of the government in charge of creating them. 

    Aside from established rules, the relative level of ease with which companies can obtain business permits and licenses, bank credits and land can vary from country to country as well. The law of the land may also be weaker in developing nations, meaning countries will not receive the same legal protections of their interests abroad as they would in the U.S. Finally, if an injustice does occur, the conflict resolution process overseas may be more time consuming and even potentially unfair compared to the U.S system.

    Regulations abroad can cover everything from paying taxes to providing shipment documentation to paying import costs and beyond. In some countries, like the U.S., these procedures take less time and effort, freeing up resources for the purchasing company. For example, the act of preparing, filing and paying taxes annually takes, on average, 175 hours in the U.S. Compare that to 286 hours in Mexico, 259 in China and a whopping 2,038 in Brazil!

    Similarly, U.S. law makes it relatively easy to export goods to foreign markets, making compliance quick and less expensive compared to other nations. The World Bank’s Doing Business Report shows both the time and cost required for exports in countries worldwide. 

    Time Required for Compliance to Export Goods by Country
    Image1.png
    Source: Economics and Statistics Administration analysis using data from the World Bank, Doing Business project.

    In many countries, including the U.S., Canada, Australia and China, it takes up to two days to comply with export policies. Compare this the majority of Africa and the Middle East where compliance can take up to a month or more.

    Cost Associated with Compliance Required to Export Goods by Country
    Image2.png
    Source: Economics and Statistics Administration analysis using data from the World Bank, Doing Business project.

    In North America, Europe and around half of Africa, it costs a company $500 or less to export goods. Meanwhile, costs in countries like Brazil and Australia are much higher (up to $2,000).
     

    Import Regulations

    In addition to investing resources to comply with foreign business laws, companies must also contend with the cost of importing goods to the U.S. This involves investing resources in filing entry documents, paying import duties and arranging for the release of the goods from the U.S. Customs and Border Protection (CBP). Failure to comply with these standards can lead to heavy fines and even higher cost of doing business. 
     

    Sourcing materials within the United States

    The United States ranks at number 8 out of 190 world economics in terms of ease of doing business, meaning it’s much easier to do business in the U.S. than the majority of the world. This rank is based on an analysis of the following categories:


    • Starting up a business
    • Obtaining construction permits
    • Acquiring electricity
    • Registering property
    • Finding credit
    • Protecting investor interests
    • Filing taxes
    • Trading across borders
    • Upholding contracts
    • Handling insolvency

    Companies that choose to import goods from overseas rather than sourcing within the United States should be prepared to handle the burdens and potentially high costs of regulatory compliance across all borders. Companies that source from within U.S. borders automatically save valuable time and money, avoiding cross-border regulations altogether.

    It is important to consider all costs and risks, including regulatory compliance costs, when selecting a supplier. Many times it makes much more sense to choose a domestic supplier over an international supplier from a safety perspective. 

    Contact Custom Rubber Corp. to learn more about our services and capabilities that could fit your business needs and budget.  

    Posted Monday, December 7, 2020 by: Global Administrator
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  • Custom Rubber Corp. Upgrading and Expanding

    The Holidays brought new presents to Custom Rubber Corp.  A total of four new machines arrived December 23rd, just in time for the Holidays!
    Some of the machines are additional capacity, some are upgrades to machines that were old and needed to be replaced.  Custom Rubber Corp.'s commitment to our customers and our employees is to continuously upgrade our equipment to make sure every machine we run is dependable easy for operators to use.
     

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  • Custom Rubber Corp. continues to add new products and customers

    Custom Rubber Corp. continues to add new products and customers.  The website is a catalog of success - successes organized by industry and by application-product usage.  Some of the recent additions are in Automotive, Protective Cases, Rubber to Metal Bonding, Electronics, Round Gaskets and Seals, and more.

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  • Custom Rubber - Second Place, Educational Outreadh

    Custom Rubber Corp. won Second Place for the ARPM's Educational Outreach Award in late 2019.

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  • "Engineer for a Day" Tour

    On February 22, 2019, Custom Rubber Corp. hosted high school students for a day-long exposure to Engineering.  The event is organized annually by Cleveland State University and Custom Rubber Corp. has participated the last three years.  
    The tour event was also the first time Custom Rubber Corp. used a new audio tour guide system.  After winning a $750 prize associated with the "Educational Outreach" award from ARPM (Association for Rubber Products Manufacturers), CRC purchased a system of 10 receiving headphones and a microphone transmitter.  
     

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  • Custom Rubber Corp.'s Innovative Use of Vision Technology

    John Bellett presented at the Industry Benchmarking conference about Custom Rubber Corp.'s innovative use of vision technology, both for part inspection and also for mold safety. (Photo Courtesy of Creative Technology)

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  • Developing Next Generation

    Custom Rubber Corp. presented at the annual industry Benchmarking conference in Indianapolis back in October about their efforts to attract the next generation of folks to the manufacturing industry.

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  • Rubber News article: Custom Rubber Corp. hosts ARPM Tour

    The October issue of Rubber and Plastics News has a two page article discussing Custom Rubber Corp.'s approach to manufacturing employment and some technological investments the company has made.  The entire article is available here....

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  • Custom Rubber Corp. Tour

    On September 26, 2018, Custom Rubber Corp. hosted a tour of High School students from Warrensville Heights High School.  The students are in an Engineering and STEM class.  The students learned a bit about what makes manufacturing in general exciting and also some specifics about molding rubber.  At the end of the tour, the students were given a project....

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  • Custom Rubber - Building the Next Generation

    Custom Rubber Corp. is facing the same challenges many other companies are facing: Where can we find additional, dedicated employees who have some training?
    At Custom Rubber Corp., there is a movement to do something about it....

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  • Custom Rubber Corp Upgrades Quality Capabiltieis

    Custom Rubber Corp. has added significant quality inspection capabilities that utilize the latest in automated vision inspection equipment.

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  • Custom Rubber Corp. article in Inside Rubber Magazine

    Custom Rubber Corp. was featured in an article in the most recent Inside Rubber Magazine.  The article discusses the continuous improvement approach that Custom Rubber Corp. is taking with Mill Drills and Safety.

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  • Molded Round Seals / Molded Round Gaskets - How To

    Custom Rubber Corp. just updated and added information to the Round Molded Gasket / Round Molded Seals page.  The information includes the three primary ways to produce a round gasket or seal and what the advantages and drawbacks are to each.  Also discussed are three primary technical issues that are important to selecting the right type of round gasket and/or round seal.

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    Custom Rubber Corp. added content to its website with a host of information about molding colored rubber.  The information includes five reasons why Custom Rubber Corp. is one of the leaders in molding colored rubber products and four reasons why product developers, engineers, and companies in general should consider specifying a color other than black for their next rubber molded component. 

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    When desigining a custom molded grommet, there are a number of things to consider.  Custom Rubber Corp. recently added detailed information regarding the issues or questions that need to be answered and an outline of how to work through the steps.

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    Custom Rubber Corp. has added detailed, step-by-step information regarding how to design a custom silicone rubber protective case for your electronic device or instrument.

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  • Rubber Bellows Design How-To

    Custom Rubber Corp. added information related to designing molded rubber bellows and molded rubber convoluted boots.  Information is now available on the five steps or questions that designers need to consider when developing a custom molded rubber boot or bellow.

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  • New Look For Molded Rubber Products Website

    We're very excited about the recent launch of our new website. Much of the content is carried over - our old site had excellent illustrations of the types of products we make and customers we serve - but the look and feel of the site is much more up to date. We've included some larger photos showing some of our employees at work and have updated many of the product pictures.

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