August 1, 2018
Global Sourcing and Manufacturing
The growing sophistication of Asian based sourcing and manufacturing is a triumph of logistics that would make an army general green with envy. Not only do all the materials required for a typical production line have to come together correctly, they have to come together at a precise moment in time. Sourcing products from China is business in today’s international era, and it demands constant upgrading of process, materials, and workforce.
It’s no longer the norm to apply borders in today’s business setting. For an example, a typical western company will engage with a China based subcontractor to manufacture their products. The materials are most likely imported from 3-5 Asian based countries, the design and marketing come from the US or EMEA, and the products are produced by mainland Chinese, in a factory which is likely owned and managed by a Taiwanese company.
In the coming months and years, Asia’s competitiveness will depend more on factors outside the factory gates. As the traditional advantage in low-cost labor begins to erode, most Asian nations will soon realize that if they want to continue to remain competitive, they will need much more than lower wages. A true global supply chain with major infrastructure initiatives and improvements will transform the way each Asian nation is interconnected with the global business community.
Companies all over the globe are realizing that a rising middle class across countries such as, China, India and Brazil are target areas, and are rushing to grab a share of these vast markets. Leading this phenomenal change is China. It has reached a feverish pace during the last few years, and China is now taking a leadership position in the world. They have the fastest growing economy, millions are moving out of poverty each year and China’s middle class is on track to reach 700 million by 2020. This country’s huge population and ever-rising GDP are forming a massive group of new consumers.
The potential of this emerging market is very attractive to global brands that are looking at selling their products in China. In addition, the Chinese government is committed to moving the economy away from an export driven model, which is dependent upon global markets to support its sales, to a more domestic consumer driven market. Once again, this is good news for manufacturers and service providers that are determined to sell to the China market.
The opportunities for investing in China as a hub for business expansion are now starting to reach maturity. Finally, the promised market of mass Chinese consumers is beginning to arrive. This is the future, and beyond.