The Biggest Reasons American Companies Flock to China for Manufacturing
There is far more to manufacturing costs than meets the eye. You’ve got to be thinking of labor costs, the costs of materials, and all the manufacturing overheads. It’s a tricky thing for a business to manufacture things and still achieve profitability and it’s why so many American companies flock to China for their manufacturing needs.
Highly effective manufacturing training
Six Sigma training and certification in manufacturing will show your ability to be a leader in materials handling and know how to work out all the manufacturing costs in terms of work in process and finished goods.
Manufacturing experts understand each step of the manufacturing process and know where the defects are coming from. More importantly, they know the defects can be reversed. These manufacturing programs are exceptional courses, whereas as an expert, you will be able to identify and also eliminate unnecessary waste in a system.
Lower-wage workers keep things cheap
‘Made in China’ is something we are all used to seeing. American companies manufacture their products in China because that country has heaps of lower-wage workers in the country. The country also doesn’t comply with so many regulations either so nothing hinders production as it does with Western manufacturers. Westerners comply more with safety, environmental, and employment regulations.
Trump wanted to make America a manufacturing superpower of the world and end their reliance on China. But in 2021, China is still a manufacturing giant and it is thought that while labor-intensive manufacturing might stay in China, it will undergo big changes.
Competitive manufacturing prices a drawcard
China offers Americans many benefits for manufacturing and just one or two reasons are their highly trained labor force, their excellent transportation and their well-financed infrastructure. Those who have their goods manufactured in China say that it would be difficult to go to India or Vietnam as Vietnam, just as an example, is much smaller than China. This means prices are likely to be higher there.
It is more difficult for products to be produced in India as they don’t have China’s infrastructure to offer the same competitive prices you get there. Their infrastructure isn’t set up for excellent manufacturing systems as in China.
A reliable supply chain in China
The pandemic has had a negative effect on the supply chains of companies all over the world. But emerging markets such as China have entrenched themselves as important to the global supply chain. They are the 2nd largest economy in the world and the leading provider of manufacturing services. Unlike other countries, China’s supply chain model has virtual capabilities, their relationship with suppliers is excellent and business transfer is frequent and regular.
Successful supply chain management in China relies on other principles and practices than what you get in the USA. Re-shoring away from such a market will turn out to be massively costly. China will continue to be a key player in global supply chains because of factors such as the pandemic and also new trade agreements.
Relying on China has meant the USA can’t innovate
Everything you need comes from China. It’s mind-boggling to know that more than 70% of pharmaceutical ingredients used in the United States are produced in China. The United States has always been dependent on China. Outsourcing production over many decades has left the country without the means to innovate.
The country is now dependent on foreign producers such as China for cheap consumer goods. It’s not only cheap items, but they also rely on China for high-end products such as electronics as well as medical equipment.