A Path to Low Cost Manufacturing for Integrated Global Supply Chain Solutions

Abstract

Many multinational corporations are seeking low cost labor and better sourcing to improve their competitiveness. China as the largest emerging market provides a great stage for this. The labor cost advantage achieved from operating in China is obvious. However, finding the right sourcing partners and developing the local management talent are equally important and much more difficult to achieve. Any company planning to source goods and services from China must be aware and ready for the challenges China poses, such as the unique regulatory environment, IP protection concern and surging turn over rate. Selecting the right location is the first and the most important step which should be based on the maturity of the local supply chain, customer proximity, pro business level of local government, labor availability, facility cost, logistic convenience, and level of tax intensives. A company must achieve these production and sourcing efficiencies without compromising productivity and quality. In addition, one should implement six sigma lean disciplines and apply “design for China supply chain” to ensure production efficiencies and to fully leverage the competitive advantages that China can provide.