China has advantages when it comes to outsourcing manufacturing over other Asian countries. China has the experience and education in delivering products that adhere to the rigorous standards that are required by both western standards and consumers. Chinese labor is also much cheaper than Indian markets.
China Outsourcing Advantages
Outsourcing to China as a manufacturer can be advantageous in many ways. China has a robust infrastructure geared towards manufacturing. They also have a good education system and a political climate that encourages trade. The availability of skilled labor at reasonable prices allows many companies to cut operating costs and training costs. This can often cut into profits especially in high turnover jobs in the states. Each employee that does not work on site means less maintenance costs. Manpower is possibly the most important resource in any company, and is also one of the largest expenses. Outsourcing in China means that costs can be reduced between 30 and 80 percent of depending on the product.
Many retailers are growing less dependent on brand names because they demand and receive good value from Chinese suppliers. Outsourcing production of a new product can also allow you to get to market sooner than if you had to build your own factory, acquire equipment and hire employees. In addition, it can bring production closer to Asian and European markets, in case you’re looking to expand your global footprint.
When a manufacturing is based in China one will have additional insight into foreign markets. This in turn will diversify reach and utilise the local products which can help in improving business growth. The Asian market is growing at an incredible rate. If one has a manufacturing unit in China it becomes less difficult to sell into the Chinese market which expands global footprint and may lead to huge growth in the company.
DISADVANTAGES
Finding a factory can be difficult and time consuming as flights would need to be made to and from China.
Quality Control is an issue being faced by manufacturers outsourcing to China. China may appear impressive on the surface in that the products look good, but standards and regulations differ from the USA. It is very important that one would have an agent in China to manage this issue. Low quality materials have been a challenge for many companies who have seen their reputation damaged by using Chinese manufacturers. Copyrights, trademarks, and plagiarism are very different in Asia and should be stipulated in any contract signed.
Language Issues
Language issues may arise as most Chinese are not proficient in English. A translator will be key to assist in the smooth communication. Also working with Chinese workers can be challenging because they will agree with you to be polite, not because they believe in what you are saying. Additionally, be careful of asking directions in China. People will give you any answer they can think of other than “I don’t know”. Again because it is not viewed as police.
The cost of shipping from a remote city in China compared to the shipping from somewhere in the USA may make outsourcing to china less attractive. Additionally there is going to be the duty cost to be paid to the US Government to determine the final price. The time difference also plays a role and shipping by sea may take at least 30 days which depending on what you are selling could affect your business in a big way. Alternatively shipping by air which could be a wait of two to three days may be a better option but will be more costly.
The Pros and Cons of outsourcing to China
http://baysourceglobal.com/the-pros-and-cons-of-outsourcing-manufacturing-to-china/
The Pros and Cons of Manufacturing in China
https://www.entrepreneur.com/article/269783
Advantages of outsourcing in China
http://www.allchinasourcing.com
