Comments on: China labor prices are rising – what it means for outsourcing

By: Oil painting portrait

Oil painting portrait — Tue, 22 Apr 2008 11:39:19 +0000

One reason for the rise is actually the demand. Most companies are into outsourcing and their primary choice of outsourced companies or personnel is China. Why? They used to be cheap yet quality of output isn’t sacrificed. And since the demand rose, it follows that the price will also rise. I wonder if the same trend will also happen in India and in other Asian countries.

By: vacuum cleaners

vacuum cleaners — Wed, 27 Feb 2008 21:32:44 +0000

I totally agree.
I think a lot of companies simply make decisions on where they THINK their costs are, but they haven’t really consulted the hard-core facts. They’re simply following trends, but the trends can change incredibly quickly, and the trends don’t also show the real facts. Because some people wake up late, they follow the trend late, but by then all the numbers have changed and you’re going to end up doing more harm than good.

By: martins

martins — Wed, 20 Jun 2007 20:03:39 +0000

Further complicating this process is the lack of a reliable supply chain, which is often broken due to a lack of materials, a lack of power to run the factory or the general lack of infrastructure needed to run a world class manufacturing center.

By: Robert Enterkin

Robert Enterkin — Mon, 21 May 2007 13:39:15 +0000

With the rising cost of labor in China fast approaching the labor cost of Malaysia, Thailand, and Singapore, it seems like US manufacturers need to rethink the total cost of ownership for their contract manufacturing requirements. When you factor in the transcontinental shipping costs to export raw materials and to import finished goods, and factor in time lost due to long transit times, is it really cost effective to manufacture in China? Further complicating this process is the lack of a reliable supply chain, which is often broken due to a lack of materials, a lack of power to run the factory or the general lack of infrastructure needed to run a world class manufacturing center.

It would seem to me that outsourcing contract manufacturing to Mexico and other low cost North American facilities in the Caribbean or Central America would make more sense today. The reality seems to be that saving money by manufacturing in China is becoming more of a fantasy, and the head aches associated with manufacturing in Asia do not outweigh the benefits. I would rather see more emphasis on rebuilding the North American electronic manufacturing sector, providing more stability for the local economy, a more level playing field from a competitive manufacturing standpoint, and easier access to the market for US manufacturers.

By: Cesar Almeida

Cesar Almeida — Mon, 21 May 2007 11:04:13 +0000

Dear Mr. Barnhart,
Thanks by the chance to discuss.
Do you have any consideration for Brazil when you forecast the impact on global manufacturing?
What I mean is, you have mentioned Mexico and Western Europe, but we need to remember that all important OEMs are here as: Foxconn, Flextronics, Celestica, Jabil, Elcoteq, JHT, Solectron, SCI Sanmina, Benchmark and others…
If you see the material from Adam Pick (Outsourcing in South America), is stated there how impressive this market can be. Living the market you can confirm this.
Why it was not included in you note?
Do you agree with Mr. Smith points?
Is it possible that rising labor cost in China, drives more business for Global OEMs in Brazil?
Thanks in advance,

Cesar Almeida
Siemens Brazil

By: John Marshall

John Marshall — Fri, 18 May 2007 13:58:55 +0000

our company sees this building in FDI trend, OEM and tier 1 CM making large scale investment in other-than-China regions.