OUTSOURCING AND MANUFACTURING 6
Outsourcingand Manufacturing in China
Outsourcingand Manufacturing in China
Chinais one of the vibrantmanufacturing company hubs in the world. There are many differentmanufacturing industries in China. These include metal fabrication,metal plating, metal stamping, machining, tool making, metalextrusion, custom manufacturing and weldingassembly. Different companies from different countries haveoutsourced the services and expertise of China manufacturing company.
Chinahas networks of differentskilled manufacturing and the firms in China can complete any typeofproduct and then do the distribution of the product to the firmoutsourcing the products (Groover,2010).China manufacturing firms understand the specifications required, thequality of the systems, and the companiesfurther go along tomonitor continuously the performance of the workup to completion. The firmsare committed to removingtrial, error and risks associated withafinancialloss from the project. All manufactured goods can beoutsourcedto China.
Afterthe decision to outsource manufacturing to China, the firmoutsourcing firmwill handle all phases of the process. The firmshandle competitive bidding. The firms also solve the problems thatdevelop over the course of manufacturing and outsourcing. The firmsalso update the progress of the manufacturing process in all thephases of production. More so, they perform the quality control to dothe delivery of the product on demand from the customer (Coates,2009).
Chinaas world factory
Chinahas become such because of the availability of cheap and skilledlabor in the country. The cheapskilledlabor is from the young population that is rich in expertise,especially in manufacturing. The expertise and cheap laboravailability haveled to increased productivity in the industry. Labor is one of themost important factors of production that is necessary forproduction. The availability of the labor that is cheap and skilledhas revamped the manufacturing industry and outsourcing in China.
Also,there isinfrastructural development in logistics and shipping in China.Transport industry too is a vital component of production. Placeswith better and improved infrastructural development facilitatefaster transportation of the goods and services to the variousindustry. Outsourcing success istherefore guaranteedsince the firms in China can be trusted because of thebetter-developedinfrastructure (Rushton& Walker, 2007).On the same note, the shipping industry is also well coordinated forefficient transportation of the goods and services.
Moreso, there is a high-qualitysupply in China. The suppliersfrom different places with different materials to the companyfacilitate easy access to the goods and services. There is also alarge local market to exploit. China is one of the most populouscountries in the world. The recent studies indicate that China isshifting its strategy and market to domestic consumption. Theavailability of the market is abigincentive for any outsourcing firm to ventureinto.Furthermore, China outsourcing and manufacturing industry offerflexibility and reliability of production. The firms from outsidethat can confidently outsource their production and manufacturing toChina since it is relatively safe to venture intoit (Hirschheim& Dibbern, 2009).
Challengesfacing Chinese Market
However,China also faces different challenges with regards to manufacturingand outsourcing. These challenges include the shortage of labor. Itisestimatedthat the elderly population will increase by 60% and at the same theyoung and working population will decrease by 35%. Other challengesinclude rapid rising of land and raw material costs that hamper theacquisition of goods and services in the industry. Because of thechallenges above, the companies should opt for a different strategyto locate their industries elsewhere outside of China. As a result ofthe rising costs, in case the companies choose to go ahead and settheir businessesin China, they should work on economies of scale and cut off mostexpenditures to maximize ontheirprofitability (Coates,2013).
LogisticsPartners for China
Thereis a needfor the logistics partners that need to work withChinato have some characteristics. However, these depend on the nature ofthe business undertaking, the size of the goods involved and the eventhe size of the respective company. For instance, large suppliers aremore reliable than small ones. The small companiescan betrustedfor certain customized services. More so, the firms should haveinformation and technology system capabilities for efficientperformance and transaction of the goods and services. Automation ofservices is very necessary especially in conducting businesses today.
Suchconsiderations are very necessary since they improve the correlationbetween the two companies. Other considerationsinclude the rates and services that on offer that the company gives.This factor will build and foster ahealthyrelationship between the firms and,therefore,better relationships. There is also a needfor a reviewof the logistic providers and establishment of two-wayfeedback communication to promoteexpedition of the activities, quality,and productivity (Groover,2010).
Therefore,China remains a big industry with established manufacturing andoutsourcing capabilities. However, somechallenges comeas a result of the vibrantmarket withskilled labor and,therefore,need to alleviate the problems to remain competitive in the market.The respective firms should determine the best approach to servingthe Chinese market since there are varied distribution and logisticsmechanisms.
Groover,M. P. (2010). Fundamentalsof ModernManufacturing:Materials, processes, and systems.Hoboken, NJ: J. Wiley & Sons.
Coates,R. (2009). 42rules for sourcing and manufacturing in China.Cupertino, CA: Super Star Press.
Rushton,A., & Walker, S. (2007). Internationallogistics and supply chain outsourcing: From local to global.London: Kogan Page.
Hirschheim,R. A., Heinzl, A., & Dibbern, J. (2009). Informationsystems outsourcing: Enduring themes, global challenges, and processopportunities.Berlin: Springer-Verlag.
Coates,R. (2013). 42rules for sourcing and manufacturing in China: A practical handbookfor doing business in China, special economic zones, factory toursand manufacturing quality.Cupertino, Calif: Super Star Press.