How many times have we walked into a store and have seen an item marked ‘made in China’? As common as this is, we start suspecting there is not a single product that is not being made in China anymore. However, there are several reasons for China's growth in the manufacturing sector.
The companies across the world are now facing fierce competition with one another and in the midst of it all, it is difficult to maintain your current leadership position while making tough decisions. Most companies in the US and other developed countries have been attracted to the possibilities of taking their production process off their hands and handing it over to someone else who can deliver the same quality at a lower price. This option naturally enticed the business owners who started exploring the opportunity of allocating an overseas partner to handle their manufacturing while they focus on their core value systems. This trend has worked beautifully for both the companies that are able to deliver based on each other’s expectations.
In this case, China rose to prominence because of its wide array of cheaply available labor, ability to customize production, and timely delivery of finished products which saves the buyer anything between 30-50%. This has made China shine high in the world of manufacturing. It is not only a tedious process, but also a very expensive one as you have to constantly deal with the overhead and the fixed costs that add to the company’s expenses and eat into their revenues. Most in-house productions are incapable of handling demands on a short notice and exceptionally large orders due to low capacity. However, these Chinese contract manufacturers have large production facilities that allow for flexibility in terms of order size.
These are some of the important factors that made China one of the most sought after destinations when it comes to outsourcing the production process. Most importantly, however, the price leadership that these buyers gain from letting an overseas manufacturer handle the production for them tops the list. Several manufacturers not only look for contract manufacturers but also look into the option of shifting their entire facilities to the Chinese border so that they can continue enjoying the reduced cost of production without being bothered in sharing their facility with another client, who may also be a competitor.
China has been able to maintain and excel the standards of production over the years due to a surge in demand and increased dependence of their buyers as China meets their requirements. They have state of the art facilities and a workforce that is capable of managing clientele from around the world despite being a non-English speaking nation. The efforts that the country has made to stay on top have fared well as more and more people rely on the “made in china” label.
