Manufacturing in the US can be challenging. It has become prohibitively expensive for many small businesses and startups. By choosing to outsource manufacturing internationally, US manufacturing businesses of all sizes have found a practical way to increase their profit margins while simultaneously growing their companies, and finding success in the business world. Recently, decision makers are asking is China still a solid manufacturing choice?
Myths about China Manufacturing
There are many rumors circulating regarding the future of China manufacturing. One of these is that the volatility of international markets will make continued growth in China more challenging. However, smart companies in US manufacturing know there are several reasons this is unlikely to be the case.
Chinese manufacturing is extremely diverse compared to other counties. Additionally, the variety of Chinese factories offer a wide selection based on quantities to be produced, technical expertise needed (including engineering, design, and prototyping), and manufacturing expertise. This wide variety of choice allows American companies in US manufacturing to choose the “right-sized” factory that most closely fits their need. The capacity to produce high-quality and inexpensive parts and consumer goods that cross a wide spectrum of uses and industries, allows Chinese manufacturers to remain competitive, even when global markets fluctuate.
One example of this principle can be seen in the recent growth rates for the steel and automotive industries respectively. While the steel industry saw a 56 percent decline in profit margins between 2010 and 2012, the auto industry has experienced a 52 percent growth rate in recent years. Machinery and appliance manufacturers have experienced similar fluctuations; yet China remains the “go to” source for competitive and reliable production.
Keeping Pace with Product Proliferation
Consumers are finding themselves able to afford items that previously have been outside their budgets. To keep pace with this trend and expand market share, US manufacturers competing in the global market find it necessary to create and maintain more and more international supply chains. Chinese manufacturers are able to produce goods with smaller lot sizes at competitive prices, allowing smaller businesses with niche products to reach new markets and remain competitive.
Skilled Labor Market
An often-overlooked benefit to China manufacturing is the size and diverse skill levels of the labor market. With the diversity of products being manufactured in China, as well as the immense variety of skill levels available, American companies now have a ‘never before’ choice of custom production capabilities. To top it off, this wide range of production choices are all supported by an unmatched, well-developed logistical infrastructure.
Knowing Where to Go
Knowing where to go in China to find the right factory, what to look for, and what to avoid is as much of an art as it is a science. It can be intimidating, time consuming, confusing, and expensive. ITI Manufacturing has been working alongside North American companies for 43 years to ensure their products are manufactured in the right factories while guaranteeing no manufacturing defects. ITI Manufacturing is the OEM custom manufacturing partner your US manufacturing company has been looking for.