Advertisement

Blog

Differences & Similarities in Asian Supply Chain Wages

End-of-year wage statistics for Asia's supply chain professionals are starting to trickle out, and show earnings in the field weathering the continuing international financial and economic pressures reasonably well.

In Singapore, a Supply Chain Manager in the electronics business will earn between $50,000 and $100,000, according to the most recent data from PayScale. That's more than 20 percent higher than the average national wage in Singapore.

Intra-regional differences in wages are noticeable, but not as large as you might think. The big loser in wages is the Philippines, where a supply chain manager earns barely 20 percent as much — between $10,000 and $22,000 — as his or her Singaporean counterpart, according to the same PayScale survey.

Here’s a breakdown of earnings for supply chain managers across Asia/Pacific:

  • India $11,500 – $27,700
  • Indonesia $21,000 – $51,000
  • China $35,700 – $65,000
  • Thailand $36,000 – $100,000
  • Malaysia $20,000 – $48,500
  • Australia $87,000 – $140,000
  • Philippines $10,000 – $22,000

Those statistics cover earnings by country, rather than by the nationality of the worker. The survey did not distinguish between, for example, a Thai national working as a supply chain analyst in Bangkok, and a different Thai national with the same qualifications and job experience working abroad in Singapore.

Wage statistics were not available for several South and East Asian countries, including Pakistan, Sri Lanka, Vietnam, Bangladesh, Japan, South Korea, and Taiwan.

The comparison reinforces some assumptions about differences in payment up and down supply chains. The Philippines is by far the cheapest labor market in East Asia, according to the survey. But other differences were not as clear.

Malaysian and Indonesian wages, for example, are strikingly similar in the survey, despite a longstanding perception that Malaysia had leapt ahead of its larger neighbor and regional competitor in retaining skilled labor. While unskilled labor does appear to flow out of Indonesia into Malaysia, it’s not clear that’s as likely in the electronics field, and for electronics supply professionals, who can earn just as much at home as abroad.

Similarly, contrary to conventional wisdom, Australian electronics distributors that seek a supply chain employee in Thailand may find no cost savings over a hire in Australia. But a Thai company operating in Australia might save money hiring an Australian, over sending one of its own.

Similarly, Chinese wages were neither as modest nor as competitive as usually presumed, and the disparity between the bottom and the top of the pay scale was in line with other nations. Across the continent, the highest-paid supply line managers earned a little more than twice what the lowest-paid earned, according to the survey.

Nor are salaries for supply chain professionals markedly different in Asia and the United States. Though it is common to hear that manufacturing has moved to Asia to save labor costs, getting components and finished goods back from across the Pacific requires paying an average salary of $64,000 to $104,000 in the United States.

That’s about double the average in most Asian countries surveyed. But it’s a job that’s impossible to outsource: Like all supply lines, the trans-Pacific electronics route needs someone at every stop, and all those people, including the ones at the end of the chain, expect to get paid.

10 comments on “Differences & Similarities in Asian Supply Chain Wages

  1. DataCrunch
    December 27, 2010

    I am surprised to see that India is at the lower end of the pay ranges on this list.  I would have thought salaries would have been on par with China, rather than the Philippines.  IT salaries have been increasing in India and just assumed that supply chain salaries would have been higher.

  2. Marc Herman
    December 27, 2010

    Hi Dave. I have a theory, but it's just a theory: that in India, more than other places, the managers are more likely to be locals than to be foreign nationals. So they are paid on scales reflective of Indian average wages, where in other places in the survey, including China, they are managers brought from offices abroad, who negotiate salaries appropriate to their home economies. Factor in exchange rates — a salary paid in Rupee versus one paid in Australian dollars, for example — and the disparity can get pretty glaring.

    I've no evidence for that; it's a starting point for investigating the issue. I'd be curious to hear if any readers in India have a better answer to Dave's question. If so, fire away.

  3. Himanshugupta
    December 27, 2010

    I am an Indian, though i have never worked in India and currently work in The Netherlands. My theory for lower wages in India is the lower cost of living. Even if i go to India, after having worked in Europe for 5 years, i will get about half of what i get in Europe. Even with that salary in India, i can manage the same kind of life style.

  4. prabhakar_deosthali
    December 28, 2010

    That is true.The salaries of Indians if compared internationally are well below par. But compared to the cost of living , even with a high rate of inflation ,which currently is around 12%, Indian professionals can manage a decent lifestyle. IT professionals are the best paid professionals in India but other industries are also catching up , Automobile industry being one of them . But in India you may find a big gap in the salary a manager gets and the salary what a Engineer or the officer gets. Most of the companies pay well to the managers so that they can extruciate hard work from their subordinates with much lower  pay.

  5. Marc Herman
    December 28, 2010

    Thanks for the background. I'm still curious about Dave's point: why do those facts of life in India produce lower wages than similar dynamics in, for example, Thailand? The Rupee and the Baht, just to choose an example, are similarly weak against the Dollar or Euro, and living expenses are not far apart in the two countries (though that will vary with region, urban/rural, etc, as it does everywhere). So why is an IT supply chain manager in India earning so much less, on average, than one in Thailand, despite being in a larger IT business and such a competitive market? There's got to be something more to this than cost of living and wage advantages, I suspect. If not, we'd expect to see South and East Asian salaries in IT supply positions, for salaries with similar exchange rates, looking roughly similar. But curiously, we don't. The study shows earnings are all over the place, and most oddly, India, with its key position in all these chains, and an English-speaking and well trained workforce, is among the lowest, rather than the highest paid. So I still feel like I'm missing a key fact here about how India's IT industry differs from that of other parts of Asia.

  6. prabhakar_deosthali
    December 28, 2010

    As per my own experience with the Electronics Industry in India goes, where I was part of the product design in a Electronics  manufacturing company, the people handling the supply chain function were semi qualified professionals. They had very little knowledge of Electronic components , the qualification process. These people used to heavily rely on the quality control professionals and the developemnt personeel for final decision making . Such people could not demand higher salaries and so their salaries were at much lower level compared to the salaries of other departments – production, QA, service and development. The supply chain professionals mainly used to handle the logistics – sending purchase orders and doing follow ups to collect material. They could not participate in the technical discussions with suppliers.  I do not know about how qualified the supply chain professionals are in countries like Thailand or Philipines. But there may lie the answer to your question why Indian supply chain professionals are paid less.

  7. Marc Herman
    December 28, 2010

    Thanks for the additional insight. It raises an interesting question to investigate further: whether the job description “Supply Chain Manager” is consistent from country to country. If the people with that title are doing far less in India than in Thailand — if the Thai manager has to know something about electronics, and in India, as you say, that's less important — than perhaps that does explain some of the difference. You're paying more to get more in other countries.

  8. Taimoor Zubar
    December 28, 2010

    I also had the same point in mind that the 'quality' of these supply chain managers may differ from country to country. A lot is dependent upon the job description and how challenging the roles and responsibilities are. One other factor is the nature of supply chain industry in the country. Importance of distribution and supply chain may be very high in China due to the high volume of exports, whereas in countries like Philippines the export volume is very low and the supply chain function may not be considered that important.

  9. Himanshugupta
    December 28, 2010

    I just want to add (or emphasize) that the salary gap between the same job description/title is huge in India. Sometime it can be upto factor 2 or more. So i seriously doubt whether the statistics presented in this report can be stretched too far. It all boils down to quality of knowledge, even in India.

  10. Backorder
    December 31, 2010

    I think a better analysis would be made on the average salaries in each country normalised on some global cost of living index (if exists?) and further weighted according to the importance of supply chain management in the business environment (and consequently the quality of work). For instance in a services heavy economy like India, the neccessity for good supply chain managers is far less than in a manufacturing giant of a economy in China!

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.