The costs of manufacturing in China have risen greatly in the past few decades. This brings them closer than ever to the costs of US manufacturing, eliminating much of the benefit of offshoring manufacturing labor expenses. Many Chinese companies are examining how companies in the United States dealt with similar costs and labor pools during the 1980s, when the biggest competitor for US manufacturing jobs was Japan. Chinese companies may have many lessons to learn from those companies that survived both the competition from Japan and the influx of Chinese-made goods when cheap labor in that country became available to manufacturers producing in other nations.
One of the key elements to lowering creation costs and remaining competitive lies in tracking and getting peak efficiency out of material flow. US manufacturing companies discovered during lean times that labor costs are not quite as important as material costs and handling. China's manufacturing has traditionally had a focus on inexpensive labor. Companies that can streamline how their manufacturing workers and plants track and maximize the use of their material resources gain a competitive edge in the manufacturing world.
The second bit of advice that Chinese companies may well glean from studying US manufacturing models is that management and labor do not need to compete. Labor unions were more likely to be created thirty years ago in America when a large figurative distance existed between the worker on the floor and the manager at head office. Today's workforce includes workers, supervisors, managers, and even business owners working hand in hand to solve the many issues that plague the modern workforce. The same type of team ethic was one of the big competitive advantages of the Japanese in the '80s and something that US manufacturing companies borrowed from them to remain in the game.
One of the largest hurdles that China's manufacturing industry must overcome is the perception of quality. Made in China is not synonymous with quality in the United States, even if the US Olympic Committee and other organizations turn to China for manufactured clothing and similar goods. US manufacturing prides itself on the perception of high-quality goods and services, and Chinese companies should strive to ensure that they are known for both quantity and quality. A focus on quality goods can help them overcome pressures from US manufacturing and foreign markets.
US manufacturing has come a long way since the 1980s. Manufacturing organizations that survived intense Japanese competition and the move to cheap labor in later years have much to teach both Chinese companies and those in other nations. As China sets its sights on becoming or enhancing its position as a world leader, it will increasingly turn to the best of the best in many different arenas. Many US manufacturing companies offer some of the best goods at excellent prices, setting a good model for Chinese businesses.
(Photo courtesy of freedigitalphotos.net)
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