Outsourcing manufacturing to China, though an attractive proposition is not a simple decision. Many issues like IPR, complex supply chains and inflexible manufacturing schedules can skew project manufacturing overheads. With low wages and strong internal markets harnessed to advanced technology, even local Chinese companies can easily enter global competitive markets. The hidden costs of outsourcing may not yield the promised savingsespecially for products that require customization, proprietary technology, or quicker reaction to market trends which cause irrecoverable losses in time to market areas. Despite these issues, low labor costs and modern technology make China a manufacturing powerhouse with an increasing number of satisfied customers. In fact, low manufacturing costs coupled with technology adaptation in China is forcing many companies now to look at China more as a partner than just an outsourcing option.
In
today's world, there is no option but to source the best supplier in whole or
in part to help put together a global product which can compete at any place in
terms of price and quality. The word globalization may be new, but the concept
started with the early tribes bartering goods, which gave access to products that
were area specific. It is a way of augmenting what one already has. Over time,
the exchange of goods has boomed into numerous types of exchanges which include
services. The proliferation of communication networks allowed access to the most
competitive professional services anywhere in the world and to internalize them
into industrial operations to profit. In the competitive environment, new rules
of the game are being re-written in the geo-political arena as trade winds blow.
Gone
are days when countries used to wage war on one another to acquire their natural
resources,and today trade barons will decide whether countries may wage war on
one another due to their global sourcing interests. Too many jobs are at stake
for other countries, so much so that politics is gradually becoming a handmaiden
of the business forces. A case in point is the Dell Theory of Conflict Prevention,
which stipulates: "No two countries that are both part of a major global
supply chain, like Dell's, will never fight a war against each other as long as
they are both part of the same global supply chain." Going back much further,
in The Rights of Man, written in 1790, Paine addressed the issue at length,
that trade will eliminate war. |
