If your company is considering sourcing in China to get products at a lower cost to import or if you’re interested in going to full-scale production by manufacturing in China, attempting to do it on your own can often be quite intimidating. If you’ve found this article, chances are that you are planning to move some or all of your operations to China. Why not? Manufacturing in China has a lot to offer and there are tremendous savings to be had.
However, as with all things, there are both pros and cons to manufacturing in China, and before you make a decision, they need to be weighed against one another to determine if it actually makes financial sense for your specific product and company.
Top Advantages of Manufacturing in China
Do you have a product you’re considering manufacturing in China? Let’s take a look at some of the advantages of working with a manufacturer that is based in China.
International Competitiveness
While it is a simple, well-known fact that manufacturing and sourcing in China is much cheaper than in many other countries, there are a number of reasons why this is true. Perhaps the many reasons are cheaper labor costs, a strong and eager workforce and existing experience and infrastructure. Because labor costs are lower than in western countries, manufacturing in China can allow for significant savings, with larger savings on more labor-intensive products.
It is important to note that Chinese workers are not underpaid, however. In fact, it is estimated that the average Chinese household that works a regular 9am-5pm job, can pay bills, mortgage and living expenses, and still save more than 30 percent of their earnings per month.
Rapid Domestic Growth
It is unlikely that your company will be selling its finished products in China, however China’s rapid domestic growth makes the sourcing of materials and components much faster. This leads to faster manufacturing times and competitive pricing.
Decreased Tooling Costs
When you combine low wages and domestic growth, tooling costs are far lower than they would be in western countries. Not only is the time needed to make the tools much shorter due to excellent access to materials, China’s experienced and technically advanced workforce is able to make these tools to the highest standards – allowing for better quality in your finished product.
Experienced Workforce and Sophisticated Technologies
Because China has been manufacturing products for itself and other countries for decades, they have a field of experienced workers who are able to manufacture products using the latest sophisticated technologies.
Ability to Focus on Your Core Competencies
When you choose to source or manufacture in China, you reserve more time to focus on your core competencies such as marketing and sales. This gives owners more time to grow their business, while your liaison to China takes care of the on-site management from concept to shipping.
Manufacturing In China Comes with Some Risks …
We would be lying if we said that manufacturing in China doesn’t come without risk. There are language and cultural barriers, quality control and procedural risks, intellectual property concerns, and more. When manufacturing in China, the best way to avoid these pitfalls is to secure the guidance of an experienced sourcing and product development company that not only has offices in China and can be your eyes and ears on the ground, but that has relationships with a wide range of vendors and manufacturers throughout the country.
In addition to partnering with an experienced sourcing and product development company, there are a few steps that you can take to ensure success with Chinese manufacturing.
- Demand perfect prototypes: If a factory says they can do something, make them prove it several times before entering into an agreement. The simple assurance that something can be done should not stand as proof. Additionally, always provide the manufacturer with the highest quality sample you can, as well as detailed plans, requested materials and packaging requirements to ensure their prototypes are 100 percent perfect.
- Stress that quality is more important than speed: Some manufacturers in China believe that speed and volume of production somehow substitutes for quality. While your sourcing partner will be able to recommend companies that are renowned for their quality, you should be extremely clear that it is quality that you value above all else. Your product’s reputation requires it.
- Always focus on the next shipment: Just because your last shipment was wonderful does not mean that you – or your sourcing partner – can relax. Do not become complacent and allow your manufacturer to begin cutting corners. Having an on-site partner to consistently check quality will assist in mitigating this potential pitfall.
- Show your value: Letting your enthusiasm and vision of the future shine through will show your Chinese partner that you are a serious about doing business. They will likely be more eager to partner with you if you can demonstrate a vision beyond just one order.
Do you have a product you’d like to consider manufacturing in China? Call our team at Trans-Pacific Facilitators today to learn more about our services and to discuss the specific details of your outsourcing goals. Connect today!