VELOCITY     Accelerating Your Supply Chain Success
The leader in global supply chain solutions

Cutting Costs & Getting It Right

NO RATINGS
View comments: newest first | oldest first | threaded
Page 1 of 2   Next >   Last >>
Jacob
User Rank
Supply Network Guru
Re: Exploring further
Jacob   2/5/2013 6:51:10 AM
NO RATINGS
1 saves

Jennifer, these are different factors which can cause fluxuations in production cost. Nothing is stable, companies have to account all such fluxuation costs, and then only they will be able to work it out for a reasonable profit.

Hospice_Houngbo
User Rank
Supply Network Guru
Re: Less attractive China
Hospice_Houngbo   1/31/2013 1:51:03 PM
NO RATINGS

"The increase in transportation costs is a world wide phenomenon and that can also affect the local manufacturing"

This is one of the reasons China is no longer the right choice for manufacturers. I wonder if there is something the country can do to reverse the situation.

Hospice_Houngbo
User Rank
Supply Network Guru
Re: Less attractive China
Hospice_Houngbo   1/31/2013 1:45:48 PM
NO RATINGS

@Jennifer,

I understand your point. China asian rivals may be  the replacement to China, but I was basing my argumentation based on  Google's recent decision to manufacture in the USA. And chances are that some other companies will follow.

Jennifer Baljko
User Rank
Blogger
Re: stop chasing your tail
Jennifer Baljko   1/31/2013 1:44:09 PM
NO RATINGS

FlyingScott -  "What happens when we have all been round the globe once and there are no more places to look.  "

Too bad the moon is too logistically complicated. It would be cool to say my phone or tablet is literally "out of this world."  ;-)

Jennifer Baljko
User Rank
Blogger
Re: Less attractive China
Jennifer Baljko   1/31/2013 1:36:20 PM
NO RATINGS

Right, Prabhakar.  It's really about calculating the total landed costs, not just one set of costs in isolation of the others.

Jennifer Baljko
User Rank
Blogger
Re: Exploring further
Jennifer Baljko   1/31/2013 1:34:22 PM
NO RATINGS

Jacob - Interesting that you mention the raw minerals issues. The duties China charges for raw minerals moving in and out of the country can be pretty expensive, something else supply chain professional have to consider. Tax incentives are a starting point but there also have to be conversations around long-term sustainability - it's too complicated to move factories every 10 years.

Jennifer Baljko
User Rank
Blogger
Re: Less attractive China
Jennifer Baljko   1/31/2013 1:30:21 PM
NO RATINGS

Hi Hospice: To your question about is this good news for Western countries - I don't know. Depends on which part of the electronics supply chain a company is in and how dependent the company is on a low-cost model.  It could be good news, though, for countries like Thailand, Vietnam, etc that are trying to move away from low-cost textile production and expand their existing technology bases. 

FLYINGSCOT
User Rank
Supply Network Guru
stop chasing your tail
FLYINGSCOT   1/30/2013 12:56:45 PM
NO RATINGS

I genuinely wish we'd all stop chasing the lowest cost route every time at the expense of everything else.  What happens when we have all been round the globe once and there are no more places to look.  

prabhakar_deosthali
User Rank
Supply Network Guru
Re: Less attractive China
prabhakar_deosthali   1/30/2013 1:37:45 AM
NO RATINGS

While looking at the rising labor costs in China, we must also consider the escalation of local labor costs which may again offset the likely advantage one may consider of using the local manufacturing.

The increase in transportation costs is a world wide phenomenon and that can also affect the local manufacturing

Jacob
User Rank
Supply Network Guru
Exploring further
Jacob   1/29/2013 11:51:06 PM
NO RATINGS

Jennifer, there is no doubt that business should be in a profitable way. Inorder to explore it further, companies had moved to China and other non-home places to gain the local advantages. But now china is no more attractive in terms of manpower or raw material. The next options are local governments has to provide tax incentives to companies for generating more business and intern employment opportunities.

Page 1 of 2   Next >   Last >>


More Blogs from Logical Link
Electronics hardware OEMs are getting their share of attention from venture capital firms. The supply chain will have to keep an eye on this trend to stay ready.
Big data is a hot topic for everyone. For the electronics industry, the full impact remains to be seen.
M2M and mobile devices are driving the Internet of Things trends, and by all accounts, it's going to be big.
The shale gas boom is getting plenty of coverage, and it's critical that supply chain managers start tuning in.
Overall, those in the corner office have some hope for the global economy. However, there are no promises that it will be completely smooth sailing.
Latest Poll
The Velocity Report Archive
Click here to see our newsletter archive.
EBN Newswire
Twitter Feed
EBN Online Twitter Feed