The Reasons Businesses Chose To Manufacture In China

Company’s manufacturing in china do so for many reasons. For instance some of the reasons are for cost and the others are for technological advances that just can’t be done yet any other place. When you think of production of consumable goods most people will associate manufacturing of consumable goods to being made in china. Likewise China is the leader when it comes to developing manufacturing goods. With that in mind we often associate bad ethical behaviors to Chinese factories. That said the biggest reason is air pollution, according to an article I read in toptennz. net1 this might not surprise you, but China is the largest producing CO2 Country1 in the world. Making a staggering 10,357 mtCO2 “Metric tons of carbon dioxide equivalent” per year compared to Canada who only puts out 557 mtCO2 each year. However this just goes to show you that China has a more liberal [Relaxed] policy about pollution.

On the other hand this is starting to change in the recent years. Back in 2008 when the Olympics took place in Beijing. The Chinese government put a ban on motor vehicles in and around Beijing this was to help reduce the amount of pollution in the air just so that the air could be cleared so when news crews would video tape outside the games you could see. Throughout this paper I’m going to hit on a lot of different subjects that are really going to give you an understanding of why businesses flock to China for production of goods. Most people don’t understand what it takes to bring a product to life but after reading this I hope you will see why some company’s use china but also why china may not be the “hub of manufacturing” for too much longer. Ethic Issues with Working in China Go to Walmart and pick up any product from a water bottle to a microwave. Everything that we put our hands on for the most part either has parts and pieces which are manufactured in China or the whole assembly is completed in China. The reason for this is companies use China due to the low-wage vs the USA 2. According to chinadaily. com. Shanghai's which is a city inside China has a monthly minimum salary top in the country last year, with its full-time workers earning 2,300 yuan ($364), and Beijing's part-time workers earned the highest hourly minimum salary at 22 yuan. Traditionally a warehouse labor worker would only make about $3. 50- $4. 00 an hour. Now there are some factories that don’t follow guidelines set forth by the government and pay employees the low minimum wage in China.

I’ve visited many factories in China that paid below minimum wage this being they do not follow the strict guidelines of the government. A lot of these factories are smaller factories where there not audited very often and they’re not producing products that would need to be FDA certified or CE compliant. A lot of these factories are making small tooling parts to larger products. So, a lot of the pollution and a lot of the bad rap comes from the smaller factories who disobey the Government. This is why I think working in china is extremely hard for the lower class. With China’s population3 at a whopping 1,416,632,540 according to. While I was looking up this number it keeps climbing every second of the day. Nothing you have an idea of how overpopulated some of the Chinese factories are could you imagine the working conditions. I can tell you from a first-hand experience how horrible some of these factories are. No not all factories are the same and that being said not all businesses are the same as well a lot of businesses try to uphold an ethical practice that not only is ethically correct but also was economically feasible for them.

The Chinese factories don’t make a lot of money on each product they sell. They make money off of the percentage of the number of products they can produce in any given day so in order to increase profits they cut corners. Often times I see this practice being done left and right. If you go and work with it factory that maybe is a little shady you will find that when it comes time to production of the goods you want. You will be disappointed in the quality control that is done. Employees of big factories work long hours for little pay and in harsh conditions. Abnormal China where eight sometimes can be cold in the winters, you will find that most factories don’t have Central air or heating for the warehouse. The reason they do this is for cost savings. The more they can cut on their expenses the more profit they will make. This creates a toxic work environment for humans who have to produce. Being a factory worker in China is no fun or glamorous job. China Labor Watch says that most employees often work in dangerous conditions and are not well-trained. The group says, “the average working hours in most factories are 11-12 a day. According to a China Labor Watch group3. History on Manufacturing in China. Looking back in time to understand how things have changed technologically for China is quite incredible. Within the past 10 years with rapid advancements in Technology advancements in robotic engineering it is changing the way the factories produce products for businesses. The range of Chinese goods includes iron, steel, aluminum, textiles, cement, chemicals, toys, electronics, ships, aircraft and many other products. China is the world’s largest emerging market economy, Both in terms of population and economic products. China is also the world's largest exporter and the second largest importer. China makes a lot of products that they then ship out to other parts of the world. Times are changing and with change ca n also because some good and also some bad for china.

In the past China’s manufacturing has been known to be the best place for Labor intensive production of goods. With advancements in robotic technology robots are slowly starting to change the way that China manufactures goods. Robotics cut down on human error as well as human fatigue. The cost of a robot it Is sometimes less expensive than paying someone per hour to operate on an assembly line. Many Businesses in China are turning to robotics as a way of changing history and how you make money. This could affect many Chinese factories because the cost of robotics is the same price whether they are in the United States or they’re in China. Many companies are looking to at alternative ways of bringing manufacturing back into the United States which could change the game for US manufactures. Times are changing so fast with technological advances that Time is unpredicted for china and how things will look 10 years from now. Looking back in time at some of the companies who have grown with time take a look at figure 1. 0. This time line show cases the advancements in technology and how Foxconn which is the largest electronic exporter in the world out of China. Many companies don’t Is manufacturing in China is a good Idea? Choosing to manufacture in China has been frowned upon here in the United States. For many reasons, working conditions, Quality control, lead time, language and culture barriers, shipping and logistics.

There are so many reasons why people don’t manufacture in China there are so many great things to come from working in China for companies. Some of the benefits are the lower-cost, rapid prototyping, Quick scalability. Has been the backbone to the Chinese manufacturing sector. In addition to cheaper labor cost and the overpopulated cites finding people to work isn’t a problem like it is here in the USA. When you’re trying to bring a product to market you have a lot of variable costs that go into the products overall COG “Cost of Goods”. When thinking about this many people look to China for rapid technological advancements in production of consumable goods. The amount of technology and the amount of manpower in China makes it a very attractive place for people to want to establish manufacturing businesses. Manpower is the most fundamental part of any company and that part is the largest expense to the business. I’ve seen in the past a product that being made in China could cost 30 to 80 percent less depending on the labor rate at the given time. Looking at the rapid growth rate in the market in China it’s increasing at an astronomical rate. When you manufacture a product that you want to get into consumers hands it’s a lot easier to manufacturer in China and sell directly to those Chinese markets to test the product first to see how the product does in consumers hands. This will also help with a global footprint of any product you are looking to mass produce. One thing I’ve noticed about the Chinese culture is the extensive knowledge in tooling and infrastructure for manufacturing.

I’m amazed at how smart some high-end factories in China can be how they’re were able to produce products today turnaround time that is unheard of for products produced in the US and that is another reason why I think manufacturing in China is so beneficial to business but also the end consumer because manufacturing in China can keep your costs down which will make the cost of the total good at a lower rate which can make it attractive to us consumers. Not to mention the fast turnaround time when customers go to the US to manufacture all good you will start with the process of prototyping. I’ve seen this process start and finish in under six months with multiple prototypes. The advanced tooling and technology is at a rapid forefront and is being utilized in many ways in China. “China’s factories are incredibly competitive, along with the ‘Made In China 2025’ plan Chinese factories are ever looking to increase efficiency with large investments within technology. The long-term investments will ensure that production costs will remain low throughout the future. Low labor costs, while remaining an important factor in decision making, should not alone justify moving or setting up Chinese manufacturing operations. ” http://www. china2west. com/pros-and-cons-of-manufacturing-in-china/ My take away from China Having been to China more times than I could count I’ve learned a lot of valuable lessons while spending time in China as well as researching the ethical behavior in China.

The major takeaways I’ve learned is that if you’re going to produce a product you want to know what type of product you’re manufacturing, and you want to know the factory inside and out. You want to have a strong relationship with that factory. You want to be in constant contact with them. What I’ve learned in doing a lot of research is that a lot of people have trouble with the language barrier difference. Having boots on the ground and in China to oversee your production line of products is the only way to ensure a quality product without any errors. Something else I found interesting is sometimes you have to go through a trading company, or a middleman. Using a middleman can sometime help with smaller order quantities and offer many other benefits of working with trade company’s. They offer great insite in finding the right factory and the right materials needed to make any product/idea you may bring to them.