THE PROS OF MANUFACTURING IN ASIA
Putting your manufacturing unit in China can be advantageous in many ways. To maintain international competitiveness, be strategic. Strategies can be positioned around reducing component costs in
existing or future product lines. For American companies the emphasis should be on strategic engagement in manufacturing with Chinese partners, making the investment into people and structures and
determining involvement based on indirect as well as all direct costs.
One of the key benefits is that outsourcing enables companies to cut operating costs. For instance, training costs can often cut into profits. This is especially the case in high turnover
jobs such as customer service call centers. Lower salaries are a part of this benefit, though the benefits go much deeper. For instance, each employee that does not work “on site” means one less
computer, and no extra or costlier maintenance costs, so outsourcing may provide a better option.
Cheap Manual Labor
Manpower is possibly the most important resource in any company, and is also one of the largest expenses. By outsourcing to China you can reduce costs by between 30 and 80 percent depending on
the labor intensity of the product. These outstanding rates will lower your cost of production exponentially.
Outsourcing production of a new product can 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.
Diversification of Business
When you have the manufacturing team based in China, you additional insights into foreign markets. Most companies who manufacture products in this country are likely to diversify their reach and
try some of the common local products and this can help in improving your business growth.
The Asian market is growing at an incredible rate. When your manufacturing unit is in China, it becomes easier to sell into the Chinese market, which expands your global footprint and can lead to
massive growth in your company.