Contract Manufacturing
5 Things You Should Know About Lean Manufacturing
In the past decade, Chinese manufacturers have embraced new methodologies and techniques to meet the increasing needs of the world.
Of all the new approaches, lean manufacturing may be one of the most commonly used.
Lean manufacturing helps organizations optimize their business process so they can speed up production to market products, cut costs, and improve quality.
As your company may begin to consider lean manufacturing, this article will explain everything you should understand before you jump into it.
1. What is Lean Manufacturing?
First thing first, what is lean manufacturing?
Lean manufacturing, lean production, or simply “lean” is a systematic methodology designed to minimize waste in a manufacturing operation while productivity remains constant.
In simple terms, lean manufacturing is an approach to managing manufacturing processes that aim to improve flow, eliminate waste and increase efficiency.
2. What Are The 5 Lean Manufacturing Principles?
Lean manufacturing was designed to optimize the use of materials, production lines, production processes and logistics.
There are five principles for lean production.
Identify Value
An accurate understanding of the value assigned to products or services is the first principle.
In this case, you need to keep in mind that:
-What are your needs and expectations?
-When do you need the supplier to finish your order?
-How much will you pay?
Map A Value Stream
As the ultimate goal of lean is to eliminate wastes, removing any wasteful practices by mapping A value stream is important.
Create Flow
Look at every step in your work process and eliminate points of making waste. If there are steps that do not create value as expected, remove them and redesign the flow.
Ensure a smooth process that can be undertaken with minimal delay or waste.
Establish a Pull System
In a pull system, units are produced based on current demand.
It sharply contrasts with a push system, in which items are produced based on forecast demand.
The pull-based system ensures that products will be produced as scheduled in needed quantity.
Seek Perfection
Continuously dig deeper and measure to achieve a perfect lean process.
3. The 8 Types Of Waste
The eight types of waste in lean manufacturing can be acronymized as “DOWNTIME”, which means defects, overproduction, waiting, non-utilized talent, transportation, inventory, motion, extra-processing.
Defects
Defects occur when the products are not fit for use.
This typically results in either reworking or scrapping the product. Both results are wasteful as they add additional costs to the operations without delivering any value.
Overproduction
In the paperwork stage, overproduction may involve extra documentation and reports, or too many meetings without action.
In the manufacturing stage, overproduction could include making more products than actual demand.
Waiting
Waiting means the waiting time between processes. It can be included as follow:
- Waiting for the actual operation
- Waiting for the materials or equipment
- The workers wait on the direction between tasks.
Non-Utilized Talent
Non-utilized talent or unused human talent means the waste of human potential.
- Do you train your people accordingly?
- Are your workers in the right positions?
- Are there any possibilities to improve your team in communication and efficiency?
Transportation
The waste in transportation includes the movement of people, tools, inventory, equipment, or products further than necessary.
Inventory
Waste in inventory means making and storing extra materials or products than needed.
Motion
The waste in motion includes any unnecessary movement of people, equipment, or machinery.
Extra-Processing
Extra-processing refers to doing more work, adding more components, or having more steps in a product or service.
4. What Are The Benefits Of Lean Manufacturing?
There are some across-the-board benefits of implementing lean principles. These include:
- Eliminate Waste
- Reduce Costs
- Improve Quality
- Shorten Time
- Improve Overall Efficiency
5. How Can You Implement Lean Manufacturing?
In an industry that is under tremendous pressure to improve productivity and quality while reducing costs, lean manufacturing is an everyday expectation. Shield Works is your perfect partner to assist you every step of the way.
With over 15,000 projects completed, our clients have full faith in us to help them improve their business. Contact us for more information.
Manufacturing Trends: The Just-In-Time Inventory Management System
You may not believe how much capital is actually tied up in inventory. Inventory, along with accounts receivable and accounts payable, is equivalent to 7% of the US GDP.
With so many resources tied up in inventory, it’s no doubt that businesses are constantly re-evaluating their inventory management system.
One of the most popular traditional methods is the just-in-time inventory management system. But after the pandemic changed the way many businesses operate, it may be time to consider a new method.
Below we have created the following guide explaining the importance of your inventory management system. We’ll also talk about finding the production planning sweet spot.
How Does Just-In-Time Work?
“Just-in-time” is a method of inventory management that means inventory arrives exactly when it is needed. It’s also commonly referred to as a “pull” system. This is because the system replaces supplies as goods are consumed.
Just-in-time inventory works based on the idea that materials arrive when you expect production to begin. However, they should not arrive before production begins.
Essentially, production can’t begin without inventory. But businesses using JIT don’t want to incur any storage costs for inventory that arrives too soon.
Many businesses have relied on JIT to keep production value balanced with inventory levels. This keeps capital free to use in other areas of the company while meeting production demand.
JIT works the best when a company has trusted suppliers. They provide consistent quality of materials at the expected times. Simultaneously, suppliers provide products in long-term contracts that mitigate price fluctuations.
Because this model relies on a smooth supply chain, unexpected supply chain interruptions can disrupt the entire process. Sudden shortages during the Covid-19 pandemic can have detrimental effects on the end production of a product.
For this reason, many businesses suffered. Over 60% of small businesses reported disruptions in the supply chain during the early pandemic.
Just-In-Time Inventory Used Successfully
However, this doesn’t mean that a JIT system isn’t effective. Just-in-time inventory management works well in numerous industries and will continue to be effective.
Take restaurants. Food preparation uses a just-in-time inventory approach because many ingredients don’t last longer than a day or two. Chefs will have to buy meat to serve every day by estimating what diners will order.
Fast fashion is a segment of the fashion industry that relies on just-in-time systems. Chains like Zara don’t order ahead for an entire season.
Instead, they’ll design and manufacture items with short turnaround times. Fast fashion brands will be able to keep up with trends as they happen.
You may have heard of dropshipping in the eCommerce world. Dropshipping only purchase products from the manufacturer when a customer places an order. The eCommerce seller carries no inventory and essentially outsources inventory management.
Based on these business models, just-in-time inventory management can be successful. Many industries will continue relying on a just-in-time system. But you may find it to your benefit to start mixing in other strategies for your inventory management.
Just-In-Time vs. Just-In-Case: Pull vs. Push
Companies use just-in-time inventory to prevent excess supply from building up. This will keep inventory low and cut costs as much as possible.
But what happens when the supply chain gets stopped? In 2020, 82% of mid-market manufacturers had to significantly reduce production or shut it down completely at some point.
This then affects sellers using just-in-time management. They won’t receive the materials and products for customers. Instead, they can only sell what they have.
With a JIT, businesses wouldn’t have a lot to sell. They would run out of existing inventory quickly.
At the same time, demand for certain products, especially health-related items, skyrocketed. Businesses in this industry could not keep up with the high demand.
Here’s where just-in-case inventory management comes in. It helps to facilitate growth by allowing companies to keep up with most demand.
JIC inventory management focuses on maximizing inventory by purchasing larger inventory orders. This helps to manage unpredictable demand and survive disruptions in the supply chain. This approach will no doubt become more popular in the wake of the pandemic.
JIC is referred to as a “push” system because inventory purchases are not based on current demand. JIT is a “pull” system because inventory is purchased to order.
The main drawback of JIC is the additional costs of holding the excess inventory. Businesses will place larger orders if they use JIC, which will increase the cost of the order and tie up capital in inventory. Maintaining the excess inventory will raise storage and management costs.
Finding the Sweet Spot
If the pandemic has proven anything, it’s that JIT can’t be relied upon alone. Supplier stability is returning closer to normal. However, the way that many businesses operate has changed forever.
Businesses are starting to realize that balance will provide the most benefits. Both JIT and JIC systems have positive qualities. Combined, they can create the most effective inventory management system.
Companies can create a hybrid inventory management model. In practice, it would use both the buffer of just-in-case and the conservative use of capital associated with just-in-time.
A hybrid system involves having some parts of the supply chain operate in a push model and others operate in a pull model. There needs to be more demand forecast involved than with JIC. But a hybrid model wouldn’t have standing inventory rest at zero like it would with JIT systems.
The main goal of finding the sweet spot is to address the needs of both long-term and short-term production. Inventory levels should be low enough to be cost-effective but high enough to survive production delays or higher demand.
You may want to consider using JIC for quick-turnover items. It can also be used for scarce items or items with long lead times. JIT inventory can be used for less popular items, like the customization of a certain product.
Leveraging the Right Inventory Management System
The right inventory system is all about balance. And when it comes time to choose your manufacturer, you want a team that understands how to utilize the best practices of different inventory management systems.
Shield Works is a managed precious assembly, manufacturing, and warehouse facility based in the heart of Zhuhai City, China. Learn more about our manufacturing services by contacting us.
What Is OEM Manufacturing? Everything You Need to Know
Running a business is expensive, especially if you produce complex products on a large scale. Operating out of your office or small warehouse isn’t going to cut it.
Building a full-on factory is super expensive. You also have to consider local labor costs and other technical headaches. The simplest solution is to go with an OEM manufacturing company.
What is OEM manufacturing? It’s partnering with a company that already has purpose-built factories. With them, you can reduce the costs and energy required in making your product.
You can also streamline the process and let your staff focus on more important things. The only thing you need to know is what they are, how they operate, and where to look for good ones. For an in-depth guide on OEM manufacturing and its uses, read on.
Defining an OEM
You may have heard the term OEM but aren’t sure what it means. You know it’s related to large-scale manufacturing and factories, but you want more specifics. OEM stands for Original Equipment Manufacturer.
These companies make and sell goods or parts to other companies to finish the product. Examples are companies that make protective glass for smartphones or car exhaust pipes.
The company that buys the components goes by the designation VAR. VAR stands for value-added reseller. VARs contract or partner with OEMs to build smaller components that go into a more complex product.
The “value-added” part comes from the idea that a VAR will do something to an OEM’s parts to increase the value. The sum of the individual parts gets transformed by the VAR into a new product and then sold for a profit.
The parts sourced and manufactured by OEMs are often small. By themselves, they don’t contribute to the overall value or complexity of the product. For example, an OEM might make the knobs on a car’s thermostat, but they didn’t design the thermostat or the car.
That said, OEMs are far more than manufacturers of simple screws and knobs. By definition, an OEM is anything that contributes to a more complex end product. This means that companies who make computer chips or other complex components can also be OEMs.
They only have to make these on behalf of a second company who will incorporate those parts into a new product.
The Basics of OEM Manufacturing
So what is OEM manufacturing, and how does it work on a basic level? OEMs fill a space in the global market for a variety of goods and components other companies need. These range from specialty bolts and screws to glass screens, electronics boards, and textiles.
Many of these companies might like to make these basic parts themselves. The issue is this is often too cost-prohibitive. Building an entire factory only to make screws for IKEA furniture isn’t worth it.
It’s cheaper and easier for companies to contract the services of an OEM. This is because the OEM has already built and tooled the factory to produce a variety of equipment. All the VAR needs to do is partner up with the right OEM company to fit their needs.
All of the top electronics brands use OEM manufacturing.
Using OEM Manufacturing
There are many ways to use OEM manufacturing. They’ve become a staple of the global economy and have made countless commercial products cheaper. Many of them take advantage of cheaper labor and government investment or subsidies.
Innovations in robotics, warehousing, and assembly line manufacturing all help improve efficiency. These also all come at a lower cost. There is nothing stopping an OEM from operating in developed economies, and many do.
However, using OEMs is most effective when you can secure the highest level quality of components for the most competitive price. This leads to a division of manufacturing operations. Western factories and manufacturers can focus on finishing products.
The automobile industry is a fantastic example. These companies rely on special OEM manufacturers to produce many of their car parts. These include battery and engine parts to electronic components in the entertainment systems.
The finished parts get assembled in the VAR company’s facility. They employ skilled workers to engineer the car, draft the parts OEMs will need to make, and put it together.
This process gets the most out of OEMs to produce high-quality local products. The OEM parts are still high-quality and selected by the VAR. Before seeing use, they also pass all necessary inspections in the reseller’s country.
By using OEMs, auto manufacturers can deliver high-quality vehicles to the market. The costs usually associated with building their own factories or components are gone. The result is consumers get cheaper cars without sacrificing quality.
The Relationship of OEMs and VARs
OEMs aren’t only specific manufacturers waiting for VARs to come along. While many OEMs specialize in specific fields or types of commodities, that’s not all they do. They have to remain flexible to work with as many VARs as possible.
OEMs and VARs work together by having a direct relationship. The VAR has to know exactly what they want, how they want it, and in what form or quantities. The OEM has to listen to these requests and find ways to accommodate them to the satisfaction of the VAR.
Communication, Flexibility, and Customizability
The most important thing in this business relationship is communication. OEMs set up their manufacturing facilities to be flexible but also high-quality. If an OEM factory can make 2-inch bolts, chances are they can adjust to different sizes as well.
The ability to accommodate multiple VARs with specific requirements is key. Quality control is also an important factor. VARs will be clear about proper measurements and specifications.
They’ll also communicate what kind of standard they expect. This is why the OEM needs to work with the VAR to meet these needs. OEM manufacturers sell to businesses, whereas VARs sell to consumers.
This means that VARs take the blame in the consumer market for defective products. Let’s use an example where Levi contracts an OEM to make the zippers or buttons on their blue jeans. It’s Levi that gets raked over the coals if the buttons are cheap or the zipper malfunctions.
The same is true if Samsung uses a faulty OEM part in their phones or TVs. OEMs need to balance flexibility and affordability with guarantees of quality and reliability. Between the two of them, VARs and OEMs need to work together to make sure both sides benefit.
OEMs in the Computer Space
A rising trend in relation to OEMs turning into semi-VARs has been occurring in the PC industry. Companies that design operating software or computer parts have been OEMs. This refers to the likes of Microsoft and Apple and, of course, Intel, Nvidia, and AMD.
The typical relationship would involve Microsoft selling Windows to a company like HP. In addition, Nvidia or Intel might also sell graphics cards and processors to HP. Windows, Nivida, and Intel are OEMs in this relationship, while HP is the VAR.
Companies like HP, Dell, or Lenovo integrate these parts into a finished PC. These are then sold to the consumer. However, with the rise of online ordering and PC building, things are changing.
It’s becoming popular for consumers to buy parts from OEMs like Nvidia or Intel. They can order everything from the graphics card to the wires and even the case online. Because this doesn’t require people to go to third-party retail stores like Best Buy, these OEMs can also function as VARs.
This gives them more leverage over the market. It also gives them more control over things like quality and manufacturing.
Where To Look For OEM Partners
There are a lot of things to consider when comparing OEMs. Cost and quality are important factors, but that’s easier said than done. For companies and VARs, there are two major regions to consider: industrial India and China.
There are, of course, many other options in the developing world to consider. You can also find good quality OEMs to partner within the “Global North,” but costs tend to be higher. India and China have similar strengths, but China wins in several key areas.
The population density in these countries and industrial economic strength are important factors. They have huge skilled workforces, which means a ready labor pool. This is an important consideration since labor shortages, and lack of specialists could choke your supply lines.
Both India and China also have tons of factories to choose from. They rank in the top 5 for having the largest share of global factories. They’re joined by the US, Japan, and Germany, which all have higher labor and operating costs.
Having a large sample size of OEMs to choose from means you’re more likely to find a good and reputable match. That said, a few hidden edge factors make China preferable over any other options.
The World’s Largest Manufacturing Country
China has almost 30% of the world’s manufacturing capacity. This puts them head and shoulders over the US, which sits at second place with 16.8%. Chinese labor is cheaper, and operating costs are lower.
Contrary to popular belief, China produces more than cheap and affordable products. They’ve developed a reputation for innovation in almost every field. They also have a huge number of specialists.
Chinese OEMs are also used to working and communicating with foreign companies. You’ll still need to do your research to find one that meets your needs. However, it’s safe to say China isn’t only the cheapest option; it’s also the highest-quality one.
The Difference Between The OEM- VAR Relationship with Aftermarket
Chances are you’ve heard the term “aftermarket part.” These are products manufactured and sold after the original product has gotten finished. To be more specific, an aftermarket part gets manufactured by a third-party company.
They are not associated with the OEM that made the original part. Aftermarket parts don’t fit into the OEM-VAR relationships and are competitors. OEMs and VARs develop a close business relationship.
How Aftermarket Parts Affect Things
The VAR wants to make sure the parts are standard. They also want to guarantee consistent replacement parts from the OEM. The VAR and OEM might draw up a contract to this effect to make sure certain products have end of life support.
To use cars as an example again, VARs will want to make sure that OEMs keep making specific car components for them. It makes it easier and cheaper for those companies to repair vehicles and source replacement parts.
Some OEMs can attempt to sell these parts directly to consumers, thus by-passing VARs. Many VARs are ok with this, as their focus is on customer satisfaction by keeping their products working. Those VARs who don’t want to get bypassed will usually agree with the OEM about rights.
If the original OEM made the replacement part, it’s official and not aftermarket. If a different company, not associated or contracted with the VAR, made the component, it is aftermarket. Many companies that make parts used as aftermarket replacements are also OEMs.
They often make parts for other companies, such as luxury cars, in the case of the auto industry. Consumers might buy a higher-quality stereo from them or replace the gear shifter. By putting these parts into a different car, they become aftermarket.
What Is OEM Manufacturing?
What is OEM manufacturing? It’s a process and approach that helps lower the costs of producing complex products. OEMs allow the consumer market to pump out affordable yet high-quality items.
Any company considering producing products on a large scale needs to know about OEMs. As long as you have good communication and do your research, the perfect OEM fit is out there. Shield Works is ready and waiting to bring your manufacturing dreams to life, so give us a call today.
Chinese Manufacturers: Finding the Perfect Partner
When it comes to manufacturing, China is the dream destination. The sheer size of the country and its population make it a natural choice for manufacturers looking to produce on a large scale.
However, finding the proper manufacturer in China can be tricky. This is applicable if you’re unsure what you’re looking for or where to start your search. Many people believe Chinese manufacturing to be sub-par, but this simply isn’t the case.
This article will cover some tips that will help you locate Chinese manufacturers that are right for your company!
When you’re keen on reading more about the utility & power of Chinese manufacturers, scroll down.
What Is Chinese Manufacturing?
In short, it’s the process of outsourcing your manufacturing to China. This is done by hiring a factory in one of China’s numerous cities and working with them on creating a product that meets your specifications.
In some cases, manufacturers may be able to hire for specific tasks. While other times, they will manufacture entire products from start to finish.
What Are the Benefits of Moving Manufacturing to China?
When you outsource production overseas, several benefits come along with it. This list is not exhaustive by any means, but it does hold evident benefits of moving your factory.
Costs
Your costs can decrease substantially. This is because China has lower minimum wages than many industrialized areas like Japan or Germany. While this isn’t true across the board (China has been increasing its minimum wage in recent years), it remains an essential factor.
Labor costs can be lower than domestic costs since most employees prefer working for foreign companies and often accept a smaller salary. This is due to several factors such as improving their resume, learning English, and skills that may transfer over into other industries later on.
Value
Chinese manufacturers can provide you with a great deal of value for the price. Compared to companies in other countries, China’s manufacturing industry is very cost-efficient. This makes it easier for your company to profit without charging customers more or cutting corners on quality control.
Scale
China’s sheer production scale means that factories have access to technology and resources unavailable elsewhere. Since there are many factories in one country, they can share ideas and implement new technologies faster than suppliers from different nations could ever hope to!
Many Chinese factories can produce products quickly and in large quantities. If you’re looking for a company that can churn out your product at high speeds and low costs, then look no further!
Why Do People Think Chinese Manufacturing Is Bad?
While Chinese manufacturers are highly sought after for their low costs and high productivity, there also exists a lot of stigma surrounding them.
Some people think that Chinese companies aren’t capable of producing products with the same level of quality as many other countries do.
However, this belief doesn’t accurately represent contract manufacturing China hubs. Chinese manufacturing is top-notch and it works at scale, unlike other locations.
China is most probably your best bet for manufacturing in the 21st century. With so much experience and resources, China can make any project come to life.
When looking for a Chinese factory to outsource your production line to, there are several factors that you’ll want to take into account:
Communication
Communication is an essential factor when it comes to any business transaction. If your supplier can’t answer e-mails or phone calls promptly, then don’t expect anything good to come from working with them!
How does the company communicate with its customers? Remember, though, quality communication doesn’t necessarily mean they’re fluent English speakers (although this certainly helps). It’s more about finding someone who will respond quickly and clearly.
Many Chinese factories focus on creating goods such as consumer electronics, toys, packaging materials, and more.
Specialization
What kind of products do they specialize in producing? If you have a specific product in mind that you want to manufacture, it’s essential to find a familiar supplier with your industry.
This may be one of the most important factors to consider when choosing a Chinese factory. You don’t want your reputation or brand name to be tarnished by poor-quality goods! You must inspect samples of their work before making any decisions.
Quality
What is the quality of their products?
Do they have experience working with companies from other countries? More and more businesses are outsourcing production overseas, so your chosen supplier likely has experience collaborating with people from different parts of the world.
However, suppose you’re looking for someone who has worked specifically with other brands operating in your industry. In that case, you’ll need to find a company that has experience working with businesses similar to yours.
How Do I Find a Supplier?
Now that we know some of the benefits of using Chinese manufacturers, it’s time to learn to find one. The best way to start is by doing online research or contacting an agency specializing in finding suppliers for foreign companies. However, there are also a few things you can do on your own:
Look for Trade Shows
Trade shows are a great place to start if you meet with potential suppliers face-to-face. They will have representatives from many different factories in attendance so you can ask them questions and get a feel for what they’re capable of.
Use a Search Engine
If you’re looking for a specific type of supplier, then using a search engine is the best way to find them. Enter in what you’re looking for and your location (or the location of the factory), and Google will do the rest!
Ask Friends Or Colleagues
If you know someone already doing business with a Chinese manufacturer, ask them for advice. They’ll likely be able to recommend a few good factories that have worked well for them in the past.
In essence, China is a great place to find manufacturers for your business. They can offer lower costs and increased production speed, which will ultimately help you succeed as an entrepreneur.
How Do I Vet Great Manufacturers From Bad Ones?
There are several factors involved when looking at Chinese manufacturers. Nevertheless, here are some key points:
Price
Price is one of the most important factors when choosing a manufacturer in China. If your product is new to the market, you will likely not have much competition. Therefore, you can afford to charge customers more for what they’re getting.
Still, there are some cases where this isn’t true (such as with commodities). This means you need to find someone offering competitive prices with high-quality products.
Quality Control
No matter how good your supplier does on price, if their result doesn’t meet industry standards, then it won’t do any good! Quality control matters.
Make sure whoever you work with has an extensive history of OEM manufacturing items before signing control of production. This is so that they know exactly what needs to be done once tasks are handed off between each stage of production.
Product assembly in China is quality-oriented. Thus, this part of the equation is a given.
Service
Even if you have a good relationship with your supplier and usually produce high-quality products, some exceptions will likely be. You’ll want to choose a manufacturer in China who is willing to work with you on fixing errors.
This should happen as soon as possible so that customers don’t get upset by poor service! China assembly service is one of the best, so keep that in mind.
In the end, finding the right Chinese manufacturers should always come down to choosing someone who can meet all of your company’s needs. This may take time, but it’s well worth doing due diligence before moving forward. Outsourcing manufacturing overseas has enormous benefits for companies looking to grow!
A successful business owner must find their niche market. They must know what product/service combination will yield the most sales.
Outsourcing to a Chinese manufacturer is often the answer for businesses that want to keep costs low. But also to remain competitive in their industry.
Manufacturing Done Right
When looking for a Chinese manufacturer, research is essential to find the best partner possible.
There are many things to consider, such as price, quality control, and service, but if you take the time to find a supplier that meets all of your needs, then you’ll be able to succeed as an entrepreneur.
If you’re looking for product assembly/contract manufacturing, get in touch with us, and we will take care of you.
Made in China: How Chinese Factories Became the World’s Factories
Chinese trade has expanded at a breakneck pace over the last several decades. In 2018, China exported a whopping $2.49 trillion in goods. The value of China’s exports always surpasses their annual import cost. This makes them a powerhouse of manufacturing and industry. Chinese factories were not always positioned like this, though, and it took a lot of growth to get there. So how did that all change?
We’re going to break down how product assembly in China got to where it is today and why it is still leagues beyond anyone else in the world. Stay till the end to see where they aim to go from here.
The History of Chinese Factories
During the period from 1992 to 2002, China implemented a series of incentives that were very attractive to foreign companies and investors. This alone had a massive impact on the growth of China’s manufacturing sector.
The term “made in China” was first coined in the early 1940s and this was because of a boycott of Japan and foreign-made products. China’s economy lacked the structure for efficient industrialization and they wanted to change that.
Chinese citizens wanted more opportunities to grow domestically. Boycotting these foreign-made products gave them an opportunity to take part in what they dubbed the National Salvation Effort.
What Was the National Salvation Effort?
This was a movement that opposed the Nationalist Government and demanded a stronger resistance to the expansion of Japan. As a whole, the National Salvation Movement was a coalition of leftist groups, albeit a loose group.
It included members of the Chinese Communist Party, including those who were both open and secret participants.
Why is this relevant? It was a crucial step in positioning China as a powerhouse, and not just in the manufacturing sector.
China Is the Factory of the World
Cheap and plentiful labor primarily aided in China’s rise as the ‘world’s factory.’ Besides this, an abundance of raw resources and low environmental regulations made it easy for them to grow. And, lest we forget, China’s extensive workforce is only matched by the quantity of land at their disposal.
If we’re talking about labor, we must acknowledge that in 1980, the average Chinese annual salary was between $416 to $508. On the other side of the world, the average American was earning 40-50 times that amount.
This salary discrepancy was one of the biggest draws for global corporations, as it meant higher profit margins. Additionally, China’s proximity to the Four Asian Tigers made it easy for global industries to transition.
Economic Reform
China began a series of market reforms in the late 1970s that established the real groundwork for change.
Because of rural land reforms, farmers benefitted more from their produce, which allowed more people to seek work in major cities.
In order to entice foreign investors, the Communist Party began establishing special economic zones. These zones had market-friendly policies that massively benefitted businesses and traders.
With this reform came significant growth, and today, China has several of these manufacturing hubs. Each one specializes in various parts of the supply chain.
For example, Guangdong focuses on electronics. The eastern provinces near Shanghai specialize in daily goods, mechanical parts, and medical equipment. The cities of Wuhan and Chongqing are known for their production of chemical products and auto components.
Why China Is Still Considered the World’s Factory
China has two major advantages as a manufacturing power, both of which have been demonstrated in the last year. To start, China’s industrial foundation is unrivaled in terms of range and depth.
With the capacity to produce anything from low-cost footwear to high-end biotech, China’s grip on the supply chain is unmatched.
China’s combination of manufacturing hubs, improved factories, and first-class infrastructure has made them even more competitive. This is true despite recent wage growth.
The Top Contributing Factors
Despite a change in international trade policies, China still holds most of the world’s manufacturing power. This is largely due to a few, consistent factors.
China’s Business Ecosystem
Industrial production doesn’t occur in a vacuum. It’s supported by a network of suppliers and distributors, as well as component manufacturers, government agencies, and customers.
Through competition and collaboration, these groups all become involved in the manufacturing process.
China’s business ecosystem has evolved dramatically in the last 30 years and there are a few noteworthy changes that stand out.
First, some areas have remained hubs for production. Shenzhen is an example, as it produces a substantial number of goods for the electronics industry. Overall, this domination of the market makes it difficult for anyone outside of these hubs to stand out.
Second, China boasts a technical workforce that surpasses any other. They also have a chain of assembly providers that seem to exceed the bounds of human capacity, making them the powerhouse we know today.
Taxes and Tariffs
Another significant factor was the export tax rebate China introduced in 1985. They set this into motion to boost the competitiveness of its exports. It effectively abolished double taxation on exported goods.
Additionally, any customer-based products were exempt from import taxes if they were coming from China. These lower tax rates helped keep production costs low and attracted businesses eager to make low-cost items.
Currency and Wages
Despite the US’s concerns that China manipulates its currency for national gain, the weaker yuan does make Chinese exports more competitive. Or rather, they become cheaper to buy with other foreign currencies.
Predominantly, it is a win for consumers all over the world, as Chinese products become significantly cheaper because of this.
And, if we’re talking about money, we can’t disregard the impact that China’s law of supply and demand plays on its worker wages.
Because the supply of Chinese factory workers exceeds the demand for work, salaries remain low. Furthermore, until the late twentieth century, most of the Chinese population were considered rural or ‘lower to middle class.’
Internal migration reversed the countries’ skewed rural-urban distribution. As the rise of industrial cities made more work available, there was a natural pull towards urban living and development.
A Working Example
Let’s have a look at how the supply of face masks gave us a particular illustration of China’s strength. In 2020, at the start of February, it made about half the world’s supply of masks, around 10 million a day. Within a month of that, output increased to nearly 120 million.
It would become excessively costly if every country were to develop its own production capacity to match rising demand. Most countries simply do not have the infrastructure and resources.
China still does manufacture a bulk of the face masks required for the pandemic. Any country hoping to make its own masks needs companies with expertise in textiles, chemicals, metallurgy, and machining.
They also need a good, consistent supply of raw materials, adequate manufacturing space, and qualified personal. Never mind the money required to keep it all running smoothly. Because of this, it’s impossible to start from scratch, which is why China had such a good head start.
All those things we’ve just mentioned? We know they were already in place. The cogs of China’s manufacturing machine were already well oiled and geared up to take on the load.
How Does China Want to Grow From Here?
So, while we know China is equipped to handle anything thrown at them from a manufacturing standpoint, where do they want to go from here?
Based on everything we’ve seen, China aims to move into more advanced lines of production. The industries they’ve pioneered till now have simply been a springboard.
As education and salaries grow, as they should do, that initial cost advantage shrinks. The aim for China now is to focus on domestic consumption and leave the chore of mass-producing, cheap, and labor-intensive items to others.
This gives them the space to focus on their own citizens. There has always been an aim to grow socially and economically but they intend to do this while maintaining a hold on their manufacturing.
On pure scale alone, China remains unopposed. We’re likely to see a massive change in time, but China’s manufacturing power is likely to remain unchecked.
There is a considerable new focus on technology and automation in particular. With the promise of robotics and AI, there is room for people to concentrate on more skilled pursuits.
Automation will revolutionize the way we make goods, even if we’re not quite there yet.
Quality Contract Manufacturing in China
As an OEM manufacturer in Chinese factories, we have the knowledge and expertise to offer exceptional service and goods delivery. We know how the system works, and we are proud of the last 16 years of service we’ve conducted in China.
We value quality, innovation, integrity, and excellence in all things, and aim to always offer the same to you.
Contact us today to see how we can help you with your OEM manufacturing, fulfillment, and precision assembly needs.
Look to the East: How China Manufacturing Facilities Provide an Edge
Choosing the right manufacturer for your business will play a significant role and how much revenue you are able to generate. For this reason, most entrepreneurs tend to work with a Chinese manufacturing plant.
However, not everybody understands the benefits that they can experience from doing so. Let’s explore the key details you need to know about China manufacturing.
Lower Overall Costs
As you might assume, one of the primary benefits of outsourcing your manufacturing to China is the lower labor costs.
This is simply due to the fact that Chinese facilities have much less overhead to work with. Additionally, they also have fewer training costs. When manufacturing domestically, facilities need to allocate a significant amount of money to cover these expenses.
This leads to businesses of all types outsourcing instead. Of course, wages in China are also lower than those in the United States.
This allows each dollar you spend to go much further when outsourcing. Keep this in mind when moving forward so that you can take advantage of the utility Chinese product assembly can provide.
Larger Production Volume
Not every business needs to manufacture thousands of products within a single order. However, large organizations often find it difficult to find a domestic facility that can satisfy their needs.
Chinese factories produce goods for a substantial number of countries on Earth. This means that China has typically created facilities that are capable of high-volume production. In fact, even the average Chinese factory could drastically outperform most facilities within the United States.
For companies that need a massive supply of their product, there is simply no better alternative than outsourcing to China. In many cases, doing so is also the only way to hit your target metrics.
Diversification
Part of long-term success involves scaling your business.
This can occur in a multitude of different ways. For instance, you might introduce a new product line to customers in order to generate additional revenue.
Or, you may break into growing markets in order to establish a niche. Regardless of how you do so, Chinese manufacturers can help you diversify your business opportunities. Creating new products, in particular, is one of the primary ways in which they can help.
In some circumstances, choosing a Chinese OEM manufacturing plant could be what helps you set yourself apart from your competition.
Quick Changes to Product Design
Domestic facilities can’t always accommodate design changes. More specifically, it may take them days or weeks in order to implement your new ideas.
As you can tell, this can easily cause issues with your sales numbers. Your current product might not be something your customers would be satisfied with. Delayed orders due to design changes also carry the risk of having your audience turn to competitors instead.
Chinese facilities are always ready to implement required changes. In fact, all you need to do is get in touch with a representative from your manufacturer and convey what you need.
More often than not, the facility will begin manufacturing the revised products immediately. This is a crucial factor to consider, as it can often mean the difference between whether or not you maintain your brand reputation.
Intellectual Property Protection
Interestingly, many people are unaware of the fact that many Chinese factories prioritize intellectual property protection.
This means that they painstakingly work to avoid any sort of infringement that could land you in legal trouble. For example, let’s assume that you sell a product that is highly similar to that of a competitor.
A reputable manufacturing facility in China will go out of its way to ensure that no copying or reverse engineering has occurred. As with any other manufacturing industry, there are shady facilities that employ the above tactics.
The good news is that you can research the reputation of your prospective factory to ensure that you avoid working with ones that use underhanded tactics. Otherwise, you may find yourself in a situation that is difficult to overcome.
Overall Efficiency
Not only are Chinese factories capable of mass production, but they can also do so at a notable rate.
These facilities have the newest and most efficient equipment that makes them capable of meeting virtually any production standard. This also allows smaller organizations to compete with larger ones.
Under many circumstances, small companies simply can’t keep up with the rate at which larger companies produce goods. Without the right manufacturer on your side, there’s a strong chance you can’t remain competitive.
How Can I Find The Factory Right for Me?
It can seem overwhelming to find a Chinese manufacturer. Not only are there time zone complications, but the language barriers in place often deter entrepreneurs from doing so. Working with a professional will help get you in touch with the facility that is ideal for your business.
These individuals will serve as the liaison between you and the other party. So, they will handle nuances making agreements, conveying production needs, etc.
You can check out this resource to learn more about how you can benefit from doing so.
China Manufacturing Can Be Game-Changing
So, be sure that you keep the above information in mind when determining whether or not this decision is right for you. From here, you’ll be able to leverage China manufacturing if it’s appropriate for your business.
Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.
The Impact of Outsourced Manufacturing on Industry Growth
Have you ever thought to wonder about outsourcing your business internationally? There are quite a few benefits to outsourced manufacturing, especially during the last few decades. One of the main benefits is how cost-efficient it can be for businesses, thereby allowing you to save money and resources while providing a living to skilled individuals.
Another benefit to outsourcing is that your business can provide specific solutions to specific issues for your customer and give you a wide range of tasks to delegate. This gives you the time and energy to focus on the core of your business without worry.
Finding experts in their trade is yet another positive in the realm of outsourcing. You can find a whole host of people skilled in their craft and willing to provide that expertise to your business.
There are many different industries that are benefiting from outsourcing their manufacturing. Interested in learning more?
Keep reading, as we’re going to show you why you should consider it and the reasons to outsource.
Outsourced Manufacturing In Retail
Though considered to be at the bottom of the distribution chain, retail can gain as much benefit from outsourcing as any other company. As a result, the practice can boost profit margins and cut costs to customers by outsourcing for cheaper alternatives to products the store already carries.
Benefits include multi-channel customer support, through phone, email, live chat, and social media. And outsourcing, in turn, assists with multiple customer inquiries across the many channels at once.
Retail outsourcing can also gain flexibility in staffing needs during busier seasons. And the extra staff takes some of the burdens of the heavy workload when numbers are high and questions need to be answered quickly.
Another great benefit to outsourcing is data analysis and collection in retail, such as online shopping. The results include showing which items are most popular to the items that are mostly being returned, supplying valuable feedback.
Overall, the process comes together to create a better customer experience, able to handle a variety of customer problems, and the likelihood of resolving those problems becomes very high.
Up Next With Pharmaceuticals
Manufacturing in pharmaceuticals is yet another way that outsourcing can benefit important, essential companies.
Outsourcing provides a wide spectrum of services like preclinical development, drug discovery support, contract manufacturing, and clinical trials. Outsourcing helps the world of developing medicine go quicker and easier.
Pharmaceutical and biotech companies receive outsourced assistance in the care of sick, elderly, and everyday consumers to maintain their health. This results in securing a trusting partnership for the ultimate good cause.
The end result of outsourcing is saving money in bringing in medicine, and for the consumer to not have to spend so much to take care of themselves.
Tech & Software
Did you happen to know that manufacturing domestically is more expensive than outsourcing it? Not a lot of people do.
Saving costs is the top reason most tech companies usually outsource to either China or India. They outsource due to the lack of raw materials available as well as lack of sufficient labor in the US.
In a nutshell, that means that saving money on manufacturing has the added benefit of also saving money for the consumer. Essentially those software companies save on costs and as a result, so do their customers.
The resulting experience is that everyone remains happy in the long run.
Time Is Definitely Money
In the current US economy, being a one-stop-shop for all of your business needs is now more of a pipe dream than anything else.
Unless you’re running the smallest business known to man, outsourcing is not only a wiser choice but a smarter one, too. The result helps you create profits and growth even in hard economic times.
One of the main benefits of outsourcing is obviously saving money on company costs which results in even longer-term cost reductions and ensuring the survival of your company.
Time is money and you don’t want that time to cost much of that money in manufacturing stateside, and it allows you to spend more time creating and less time stressing.
Focus On The Important Stuff
Snowballing from the section above, being cost-efficient in the long run can have a positive effect on your company when you outsource. Namely, allowing you to focus on the company you’ve worked so hard to get off the ground.
Saving money is important, but so is taking care of your business, free of unnecessary headaches that extreme worry about costs can bring.
Savings can increase sales and revenue, giving you the time to focus on core areas of your house. Those areas being marketing, research, and development, instead of being concerned if your customers aren’t getting the service they need.
All in all, outsourcing contributes to a bigger, more robust bottom line for you and your workers. Saving you the money and hassle for a hopefully long time.
Being More Efficient
Another outsourcing benefit, aside from saving on costs, is definitely finding experts who are masters at their trade. Thus, ensuring that all of your bases are covered when it comes to customer service.
Any outsourced expert who can do their job the best is naturally very useful to any company worth their salt in providing a quality product for their consumers.
If you want all your customers to receive answers to any query they pose, having someone with proven expertise is always pivotal. Outsourcing lessens you of all the stresses of whether your people have all the necessary answers at hand.
Less stress, along with increased productivity and efficiency contributes even more to your company’s bottom line. And it gives you more confidence in the resources you acclimate along the way through time.
The main point here is that having outsourced experts on the payroll is a setup for all kinds of success in the future.
Check Us Out
We hope that this has been a more than interesting read for anybody wanting to try outsourced manufacturing in the near future.
Why not start here, at Shield Works?
We can help you with any outsourcing knowledge you need as well as provide you with our company expertise to assist you in your outsourcing. As a result, it allows you access to our resources to walk you through outsourcing for your company.
Whether you need answers to your questions or simply want to acquire our services, please check us out right over here. Can’t wait to hear from you!
Is It Difficult to Set up Contract Manufacturing?
In 2018, the global Contract Manufacturing Organisation (CMO) was valued at $92.42 billion. Business is booming, and more companies than ever are now using contract manufacturing.
So, what is it, and is it right for you?
Let’s find out.
What Is Contract Manufacturing?
Businesses that use contract manufacturing hire other companies to produce their products for them. This provides smaller businesses with a significant advantage.
They can sell their products on a large scale without needing the assets required to run a large warehouse or factory.
It’s the dream of any entrepreneur or business owner: Your product will be manufactured swiftly and sold in vast quantities by a contract manufacturer.
This process can save time and money, all while increasing the reach of your business. A contract manufacturer can be based anywhere, but China and the U.S provide some of the most popular services.
The Benefits of Contract Manufacturing
Businesses of all shapes and sizes can benefit from contract manufacturing. Here are just a few of the ways it can help you:
The Hiring of Service or Labor
With contract manufacturing, it’s also possible to subcontract labor. For example, if you’re a smaller company, you might not have enough employees to make your production process run smoothly.
In these cases, you can outsource. This method is popular with many large-scale manufacturers, especially as you’ll be able to select manufacturers who are experts in your specific field.
You Gain an Operational Advantage
If the demand for a specific product is high, and a contract manufacturer can provide the capacity to meet this demand, you’ll generate more profit.
In some cases, you’ll also be able to work with contract manufacturers if you’re looking to pilot a new product. They’ll be able to test the market for you before you launch into large-scale manufacturing, saving you time and resources.
Flexibility
This is one of the most significant benefits of contract manufacturing. They’ll have the resources, time, and manpower to adapt to the specific needs of your product.
This means it can often get to the market quicker than you can achieve by working in-house.
You’ll also find that many suppliers offer a range of services. These can include warehousing and 3PL services, quality inspection and testing, manufacturing, order consolidation, assembly, IP servicing, and more.
If you outsource and select the appropriate supplier, the expansion opportunities are vast. Your customers will also be satisfied with more resources.
CM’s can provide high-quality testing and assembly, so your products are guaranteed to be safe and fully functional.
You Can Enter Different Markets
As a merchant, it can sometimes be hard to trade and perform business in other countries.
When you outsource and provide contracts to manufacturers in different countries, you’ll find it much easier to sell your products outside your national market.
It can also be cheaper to enter other markets through contract manufacturing, so you’ll give yourself the best chance to generate more profit.
You Can Dedicate More Time to Selling
Marketing is an important business. Suppose you can’t target potential consumers effectively. In that case, the quality of your products won’t matter because you won’t be reaping the rewards.
If you use contract marketing, you’ll be allowing other people to handle the practical side of your business while you focus on selling. As a result, you’ll be able to strike a better balance and give yourself a fighting chance in the market.
High-Quality and Low-Cost
Your products will be safe in the hands of professionals who can use their expertise to maximize the quality of your products. Many contract manufacturers are experts in production activities.
They can often perform this work to a higher standard than most businesses who choose not to outsource.
What Are the Disadvantages?
The benefits of contract manufacturing are substantial, but the process doesn’t come without its disadvantages. These can include the following:
Lack of Control
You’ll lose control over your production activities. If you have solid and existing production skills, you might choose not to outsource. If you’d prefer to hand-pick your employees yourself, this may also be a problem.
Although you’ll be able to select the manufacturer yourself, you won’t be able to choose individually or approve the people who manage your products. Your CM will take care of this for you.
Potential Delivery Delays
Contract manufacturers work on a colossal scale. Sometimes, due to a heavy workload, they may not produce products on time, and your customers could experience some delays.
Potential Outsourcing Problems
If you choose to outsource abroad, you could be interacting with people who speak different languages and live in different time zones. If you’re impatient, communication could become stressful for all parties involved. Make sure you’re happy with who you’re outsourcing to.
What channels will you use to communicate? Are you happy to speak with manufacturers in different time zones, even if it’s not during your business hours? These are all critical questions to consider.
Are You Ready to Get Started With Contract Manufacturing?
We hope that having read this blog post you now have a clearer idea of why you need contract manufacturing.
If you’re looking to hire a labor force, access better equipment and facilities, and/or have goods built, contract manufacturing could be a perfect solution.
You’ll also be able to negate start-up costs, improve product quality, concentrate on your brand and keep up with seasonal demand.
Contract manufacturers like Shield Works offer companies an array of different services and high levels of expertise. So if you’re looking for a reliable manufacturer and want to move your production to China, contact Shield Works today for more information.
All About Contract Manufacturing in China: 5 Tips
It’s no secret that outsourcing your manufacturing obligations can save you plenty of time and money. In fact, China is one of the most popular destinations to do so.
But, not every entrepreneur knows everything they should about contract manufacturing in China. So, we’ve put together a guide with all the details you should keep in mind.
Let’s get started.
1. You Need to Find a Reliable Supplier
As you might guess, you’ll need to find a reputable supplier before you can move forward with your manufacturing obligations. Although this responsibility can seem overwhelming at first, is not as difficult as you might anticipate.
In general, you’ll want to consider the following factors before you make your decision:
- The size of the factory
- The location
- Total production capacity
- Exclusivity
To elaborate on this last point, you should decide whether or not you want your supplier to exclusively manufacture for your business during the production process. Once you’ve figured out the necessary criteria, you can begin your search.
Keep in mind that either you or a dedicated professional must visit the actual facility before production begins. This is to ensure that the facility meets all your needs and that you aren’t being misled.
2. You Must Register Your IP
Unfortunately, many entrepreneurs are unaware of the fact that they need to register their intellectual property in China. This means that you should pursue any necessary patents, trademarks, or copyrights.
Foregoing this obligation can easily become a significant obstacle for your production process if another entity in China decides to register your IP under their name.
Not only will this prevent you from manufacturing a product, but you could also run into legal issues for infringing upon their copyright. Due to the murkiness of international law, it can be highly difficult to prove that you were the original creator and owner of a particular IP.
Even after you have registered your IP in China and found a reputable manufacturer, there is one extra step you need to take.
You must have your manufacturer sign a nondisclosure, non-use, non-circumvention (NNN) agreement in order to further protect your rights. Anyone who attempts to avoid this obligation is someone that you should never work with.
3. Prioritize Quality Control
Ideally, you would be able to provide your manufacturer with the necessary information and then receive a high-quality product. But, this isn’t always how things turn out.
It’s not uncommon for you to encounter quality issues while outsourcing your production overseas. Fortunately, though, this is often a result of misdirection that can be resolved through communication.
The best way to accomplish this is to have a third party regularly conduct QC checks during the production process. This will allow you to catch issues as quickly as possible and then take steps to remedy them.
Failure to do so could easily result in dissatisfied customers, delayed deadlines, etc. Put simply, brushing off your quality control obligation comes with a strong risk of hurting your brand’s image.
4. Preserve Approved Samples
It’s not abnormal for different batches of products to have inconsistencies between them. To elaborate, the first few rounds of Chinese contract manufacturing may meet your standards while subsequent batches may fall short.
To help keep everything on track, it’s essential that you preserve copies of approved samples. This will give your manufacturer a solid reference that they can strive to duplicate in the future.
Additionally, you can use an approved sample as an index of whether or not a current batch meets your standards. If it doesn’t, your manufacturer is obligated to make changes.
But, these can take a significant amount of time to complete. This also means your manufacturer may not be able to adhere to your time constraints.
So, it’s in your best interest to have multiple high-quality samples that your manufacturer can use in order to streamline the production process. In the event that your standards change, you should obtain new samples as quickly as possible.
5. Establish an Original Equipment Manufacturer (OEM) Agreement
For those who are unfamiliar with this type of document, this is an agreement between you and your manufacturer that aims to remove any form of ambiguity in your relationship.
This means that you need to elaborate upon any minute details that could cause complications in the future. In practice, you’ll find yourself having to clearly define the color you want your product to be, the projected timeline, etc.
In fact, colors are defined by Pantone number as opposed to terms like ‘red’ or ‘blue.’
Other factors to consider include:
- Ownership of tooling
- Dispute resolution
- Payment terms
- Quality requirements
- Certification
The same can be said about product weights and dimensions. In addition to all of this, you’ll need to ensure that this agreement is enforceable in China and not just the United States.
This often means working with a Chinese legal professional to help you navigate the nuances of Chinese law. Additionally, it’s required that you write the document in Chinese.
Otherwise, your manufacturer could break all of your guidelines and suffer no consequences.
Contract Manufacturing In China Can Be Game-Changing
So, it’s essential that you keep the above information in mind. From here, you’ll understand everything you should about contract manufacturing and can then make the most of this opportunity.
Want to learn more about what we have to offer? Feel free to reach out to us today and see how we can help.
The Benefits of Chinese Manufacturing
Are your manufacturing costs running your business into the ground? Are you looking for a better way to have your goods produced? If so, you should consider turning to Chinese manufacturing.
There are several benefits of choosing a foreign manufacturer. To help you determine whether it’s the right decision for you, we’re going to discuss those benefits below.
Lower Costs
The most obvious benefit of Chinese manufacturing is lower costs. Costs are lower in China for a variety of reasons.
For one, there are fewer regulations on Chinese businesses. As such, they have much lower overhead costs. This enables them to produce an item at a lower price, thus allowing them to pass a lower price on to the customer.
There’s also the fact that labor costs in China are substantially lower than in the United States. Workers don’t need to be paid as much, thus lowering the overall cost of manufacturing. Again, these savings are passed on to the consumer.
If you want high-quality products at a very reasonable price, having your products made in China is the ideal option. You’ll save tons of money, allowing you to get your business out of the red as soon as possible.
More Products
Not only do Chinese manufacturers work cheaply, but efficiently as well. As such, they can produce a substantial number of products in just a short amount of time.
This could bode well for your business, especially if you’re struggling to keep up with demand. The rapid manufacturing pace of Chinese factories will maintain a steady stream of products into your warehouses. You’ll never have to worry about whether you have enough supply on hand.
What makes Chinese manufacturing so efficient? 1. Less regulation, and 2. Practice! These companies have fine-tuned their operational processes, allowing them to be extraordinarily consistent in their manufacturing efforts.
Easy Scalability
Odds are, your business won’t stay the same size forever. At some point, you’re probably going to want it to grow. After all, it’s growth that increases revenue, and increasing revenue is one of the primary goals of running a business, right?
The key is for you to have a manufacturer who can keep up with demand when the time comes. Chinese manufacturers are more than suited to do so.
As was noted above, Chinese manufacturers can produce unbelievable amounts of products in just a short amount of time. So, if you ever need to scale up your business, a Chinese manufacturer will be able to accommodate you. Just make the call and your wish will be granted.
Knowledge of the Product
It doesn’t matter what your product is. Odds are, there is a Chinese manufacturer that has manufactured it at length. This is a good thing, as it means that your product can be made to perfection.
This wouldn’t necessarily be true of other types of manufacturers. After all, if they’ve never manufactured your product before, they’re likely not going to do it perfectly the first time. In fact, it could take months or even years before they’re able to adequately manufacture your product.
Utilizing Chinese manufacturing allows you to take advantage of a tried and true knowledge base. These manufacturers have manufactured your type of product many times before and will have no problem doing it again for your business.
An Enhanced Ability to Try New Products
You’ve been selling a single product for a while now, and have seen some good success along the way. But, at this point, you’ve reached about as high as you can reach with it. For this reason, you’re considering selling new products in addition to your original product.
The issue, of course, is that it costs money to sell new products. But with Chinese manufacturing, you can greatly reduce your cost obligation, thus making it easier (and less risky) to facilitate the change.
Were you to use an American manufacturer, you would have to pay a substantial amount of money just to get the new product made. This would be fine if you knew that the product would sell as intended, but you can’t make that guarantee. In other words, it’s tremendously risky.
So, if you’re interested in expanding to new products, there’s really only one option: you have to use a Chinese manufacturer.
Good Quality
When you think of Chinese manufacturing, you might think of poor quality. Yes, in some cases, that is certainly true. After all, not all manufacturers are created equal.
But that’s the case in the United States as well, just as anywhere else. In the end, it’s all about the manufacturer you choose. Some will do a good job, some will do a decent job, and some will do a fantastic job.
Just be sure to vet your manufacturer before signing any contracts. Ask to see examples of their past work and make sure that you’re totally satisfied with the quality.
Remember: Chinese manufacturers have devoted substantial amounts of time working on these products. As such, many of them have perfected the processes, and know exactly how to create the product in question.
Interested in Utilizing Chinese Manufacturing?
What do you say? Are you interested in utilizing Chinese manufacturing? If so, we here at Shield Works are the people to see.
We manufacture a wide variety of goods and do so at a low rate. If you’re at all interested in manufacturing in China, we have you covered.
Contact us today to discuss your needs!