amp Louis Riegger Silk Road Chinas early advancement Iron making Chinese Civil War History of Outsourcing to China Issues in the beginning Pros Cost differentials Cheap manual labor ID: 693286
Download Presentation The PPT/PDF document "Outsourcing to China David Murillo" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Outsourcing to China
David Murillo
&
Louis RieggerSlide2
Silk Road
China’s early advancement
Iron making
Chinese Civil War
History of Outsourcing to ChinaSlide3
Issues in the beginning. . . Slide4
Pros..
Cost differentials
Cheap manual labor
Expansion capabilitiesMass market
Pros and Cons of OutsourcingSlide5
Cons. . .
1) Quality control2)Low quality materials
3) Language issues4) Copyright Issues
Pros of Cons of Outsourcing
Slide6
Growth in the U.S. goods trade deficit with China between 2001 and 2013 eliminated or displaced 3.2 million U.S. jobs
China entered the WTO in 2001
In 2007, North American and European business made up to 40% of all offshore work done in China.
Impact of outsourcing on USSlide7Slide8
How to outsource manufacturing to China
Use
local
agent for representation
Customs and Culture are different than in USA
Difficulties with language
Find a
manufacturer
for your products
Search trade shows in China
One of largest
tradeshow worldwide
is in
Guangzhou
, the state captial of Guangdong Province Slide9
How to outsource manufacturing to China
3. Establish Guanxi
A good business relationship is essential in China
The cultural customs are deeply rooted in its history
Following basic cultural norms and rules is important
4. Be direct in stating your needs to the your partners
Chinese keep a low profile and avoiding any words that might cause embarrassment
Always state your needs directly and specifically Slide10
How to outsource manufacturing to China
5
. Examine all points in the supply chain
6. Audit the factory to inspect the products they are making for you Talk to management, of course, but also talk to random workers
Make these inspections regularly
7. Arrange for shipping of the products to your business or warehouse
The logistics complex, so a logistics provider might be helpful
Slide11
Threats for China’s manufacturing industry
Rising wages lead to higher production costs
→ Other Asian countries like Philippines,
Indonesia , Pakistan,
and Vietnam are cheaper in terms of labor costsSlide12
Threats for China’s manufacturing industry
Example:
The avaerage monthly wages in the Vietnam are only 1,600
CNY compared to 5,000 CNY in China (Industry and Construction)
1 Vietnamese dong = 0.000290832177 Chinese yuanSlide13
Threats for manufacturing in China
Population in working-age is
declining since 2015, no longer has demographic
(population) bonusReason is due the one child policy. But the policy was change to two child by 2016. Slide14
Opportunities for China’s manufacturing industry
Increasing labor productivity/Automation
→ Estimated growth is 5.5% in average until 2030
Higher quality of the products
Specialization of locations
→ Hangzhou, financial services
Better intellectual property rights protectionSlide15
Opportunities for China’s manufacturing industry
The middle and upper-middle class is growing fast
→ demand on the better products from international companies
Strong technical skills→ China can be home for more research and development (R&D) centersSlide16
THANK YOU !