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Localization, producing near the consumer, often reduces total cost due to shortened supply chains that con
tribute to a lean and agile strategy. The savings on non-manufacturing costs as a result of producing in the market in which the products will be sold can often overcome a 15-20% manufacturing cost gap caused by an 80% wage gap. Using the Total Cost of Ownership Estimator® (TCO) instead of manufacturing cost or Free on Board (FOB) price when companies make siting and sourcing decisions is the best way to recognize these savings. This is part one of a two-part series on the benefits and use of TCO.
