It has been over two decades since China opened itself up to the world and unleashed an influx of over one billion consumers. Theses numbers have for sure changed the way globalization has evolved and forever altered the panorama of doing business overseas. The outsourcing market of China continues to grow and rightfully so. The advantages are tangible and sheer amount of population is one reason to give the country a truly competitive edge over other nations with such a strong presence in the industry of manufacturing goods. Doing business with China has opened up the doors to many entrepreneurs who have found an affordable way to help the business take off, as well as helping bigger companies sustain strategies that can make their own products more accessible to customers while at the same time continuing to make profits that can ensure they will stay in business for the long run.
It goes without saying that doing business with China also presents it own set of challenges like a business culture that is unlike anything that western organizations are used to, a language barrier and a completely new set of governmental regulations and guidelines that must be understood and embraced in order to make the most out of your relationship with a partner that can truly change the way your company does business today.
This is probably the reason why most people think about China when considering outsourcing the manufacturing portion of their supply chain. Manufacturing in China does bring down production costs considerably and that happens for many different reasons. Labor costs, for example, are much lower there for being such an intensive industry, and that is something that can immediately translate into profits for your company as it allows you to offer more competitive prices to your customers. Raw materials can almost always be found there at lower prices as well, just like the equipment utilized in the processes. Taxation and environmental considerations are also very different in China and that can benefit your bottom line in the future.
While there are some considerations that can balance out the lower production costs that China offers, like for example shipping costs and the time it takes for products to make it across the world; in the end you can almost always be certain that it will be worth it if you make the necessary adjustments and plan accordingly.
It has been the experience of many small volume customers and entrepreneurs that they have been met with better service when dealing with Chinese companies than with their own counterparts stateside. It seems to be the case of China that they rarely turn people back because their business is too small and instead of simply denying your requests, they find a way to accommodate you so both parties can be benefitted from a business relationship. It is said that the entrepreneurial spirit of the Chinese is a factor that draws many companies to do business with their organizations and to adjust their way of doing things to an ally that is located half a world away. That last point brings forth another aspect to consider and that is the language and cultural differences that you must face when dealing with China. While many people in China do speak English, it is not something that you will be lucky enough to find 100% of the time. This can truly create an issue if you do not speak the language. It is important to take this issue seriously and if need be, to hire professional services for translation in order to avoid mistakes that can cost you and your company a lot of time and resources. Communication is not only language, cultural differences also factor into the way your message comes across to your Chinese partners. You must be as clear as possible and not take anything for granted. The Chinese are specific and precise with the language to a fault, so make sure that you are literal when you have to be and explain yourself accordingly when you are not.
Output times and volumes
Factories in China do not shy away from producing large orders in record time and that in itself is a great advantage that will draw many customers to their businesses. Turn around times are fast and almost always on time. They have a way of always meeting the deadlines they agree on and doing so without any issues along the way. This is quite important because when you can find partners this reliable, then you can offset the long waiting periods of time for your products to arrive from overseas and the proper contingencies can be set in place in order to have a smooth operation of your supply chain.
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* Featured Image courtesy of Lei Han at Flickr.com