In today's global economy, few inventors give serious thought to manufacturing in the US or Europe. The costs are simply too high at a time when consumers (and retailers) expect you to strip out every cost and get the price lower, lower, lower.
But is China still the answer? There’s a growing discussion about how it may not be. BusinessWeek says increasing labor and shipping costs could price China out of manufacturing, with other nations including Vietnam and our neighbor Mexico stepping in with emerging capabilities... and more attractive costs.
So before you book that pricey China Airlines ticket, be sure you consider all the alternatives and make the choice that’s best for you.
All that said, our VP of Operations Tom Krysiak, who’s been in manufacturing for 20+ years, says inventors should definitely keep Chinese manufacturing in mind. He says the talk of moving elsewhere is much more applicable today for heavy equipment and goods (ie: forklift batteries, machines, large furniture) than for lighter goods… largely because of the shipping. More insight from Tom:
Other nations are emerging as players in manufacturing, but China’s already there. Depending on what your invention is, you may want to stick with China until the others have built up their capabilities and proven themselves. China’s not going down without a fight. Among the ways it is evolving to be more competitive: offering extended payment terms (in other words, giving you more time to pay for your production), accommodating smaller production runs, even relocating factories further inland so it can offer you lower labor costs. Interestingly, Chinese manufacturers themselves are also considering setting up factories in places like Vietnam, Indonesia, and Cambodia. Some would call this diversification. We say if this isn’t telling of what’s to come, we don’t know what is.
Comments