The Exaggerated Death of Chinese Manufacturing
We get asked this question often by our clients, “Should we consider somewhere else besides China as we determine our manufacturing footprint?” Our answer has remained constant throughout the downturn and into the recovery: Yes, of course! Your supply chain design depends on many factors, including the cost of labor, but also overhead, transportation, lead times, supply base, local skill sets, markets served, demand variability, risk, etc. There is no absolute right location for all manufacturing.
Last week, Businessweek published an article called “Why Factories Are Leaving China”. The reporting accurately describes China’s rising wages and currency, but the title contains the sort of hyperbole that we have seen quite a bit recently. There is a great deal of talk (wishful thinking, perhaps?) that manufacturing outsourcing to China has reached some sort of tipping point, and now work is going somewhere else.
