Why Should I Consider Sourcing a Manufacturer in China?

There are numerous facts, opinions, and misinformation flying about regarding this issue. We’ll tackle the pure business reasons as to why China makes an attractive manufacturing destination and why companies continue to source factories there.

Supplier Base: A few quick facts: China’s supplier base is incredibly expansive. While the country imports a substantial portion of sub-components and materials from other countries, a great deal of assembly work for consumer products is done in factories in China. Sourcing of apparel, textiles, consumer electronics, plastics, toys, car products, lasers–China offers manufacturing networks supporting a very wide swath of industries. This allows the country to achieve economies of scale because larger clusters of factories are surrounded by clusters of supporting factories (think materials, sub-assemblies), which helps to push every factory’s costs down and make supply chains more efficient. In addition to an established base of factories, China’s infrastructure (roads, ports, bridges) is robust. This means more efficient transportation of goods. If you want to source a contract manufacturer for a product, chances are you can find one in China. Whether it is the right contract manufacturer for your company is a question that needs more exploring.

Increasing Sophistication and Capabilities: Many of China’s factories have improved a great deal with respect to manufacturing capabilities, efficiency, management sophistication, and customer service. It’s possible to source factories offering value added services in design and engineering related areas and reduce total product development and total lifecycle costs.

Cost: This is the primary reason that companies source products from China. China’s tremendous, low-cost labor force offers astounding cost advantages for manufacturing. Cost savings achieved through tooling and molds, unit costs, packaging, and other design and engineering functions can be substantial and make or break the competitiveness of your business and products. Of course, these cost savings must always be considered in conjunctions with quality, shipping and time to market, and the total cost of ownership in general. Pursuing a low-cost strategy in China can create tremendous disadvantages for your company if not handled well.

Access to the Chinese Market: In recent years, more companies are continuing their sourcing of manufacturing and establishment of factory facilities in China with the primary purpose of being located within the vast commercial opportunity that China’s growing economy presents.

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