The Streamlining of China Manufacturing Operations
Low-cost labor in China is slowly diminishing due to the heavy influx of companies moving to the country to set up China manufacturing operations. Although Chinese wages are still somewhat competitive, they do not offer the advantages they once did. Therefore, manufacturing companies are adopting other ways to fine-tune operations in order to cut costs and remain competitive in an atmosphere of global overcapacity and booming domestic markets.
A couple of areas which are being looked at for slimming down is increasing the quality of products and reducing lead times. As a matter of fact, many of the streamlining ideas that are now taking hold in the China manufacturing sector have come from approaches utilized by other countries who are experienced in lean manufacturing processes and are bringing them with them to the country. One of the forerunners to such slimming operations is Toyota Motors which utilized such methods for not only remaining competitive, but also for excelling in the industry over a generation ago.
Tools that are used for the leaning process in China manufacturing operations first identify ineffective processes and waste and then eliminate them. Such lean tools also reveal areas of instability and variability which are then dealt with. All of these areas have plagued the China manufacturing sector and, by identifying and eliminating or streamlining these problems, greater productivity is created at lower cost.
Before the surge of foreign investors set up shop in the country, managers of China manufacturing operations didn’t consider such streamlining because of the relatively low labor costs. However, with that key factor changing, they are now beginning to see the competitive advantages of streamlining other operational areas with the help of foreign leaders who have been applying such procedures for quite some time.
There are still some obstacles to be overcome in the streamlining of the China manufacturing sector, however. Regardless of the efforts of manufactures to make operations more efficient, supply chains, for example, can slow efforts down because Chinese suppliers are more unreliable and unstable than in other countries which can affect the outcome of certain areas which are being fine-tuned.
Another hurdle lies in the area of Chinese workers. The Chinese are not as adept at problem solving as other high producing countries such as the United States or Japan. Therefore, their sluggish ability to identify problems and then effectively correct them handicaps the streamlining efforts of many companies.
Recent reports show that manufacturing in the country has come in at its highest over the past two-year period which shows that the streamlining process is working. As more of the country’s other problems are solved and fine-tuned, manufacturing in this booming country will continue to offer investors a shimmering promise of growth and expansion, not only throughout other parts of the world, but also in the rapidly growing Asian markets.
If you require help setting up a China manufacturing operation and getting it started off the right foot, or need assistance with strengthening your Chinese company operations making them more efficient, contact Asiatic Sourcing.