Deciding On Using China For Your Logistics Needs
China has been known to be a very cost-effective country to manufacture and transport goods. In fact, businesses all around the world make use of China's low labor costs to get their economy bustling. But in recent years, it seems that businesses are starting to shift away from such practices for several different reasons.
The first reason businesses want to move their logistics operations is because of the lack of management. By outsourcing your logistics to another country, you will also have to send management staff to the country to ensure proper management of the production process. This isn't feasible for medium-sized businesses who don't have the personnel to perform such an act.
We all know what the oil and gas crisis has led to- increased costs associated with travel. This is bad news for businesses who already have logistics operations in China, since they will now be paying more for the same outsourced services. Things aren't expected to get much better until new modes of fuel and transportation are created. Until then, it isn't as cost effective as it once was to outsource to China.
A single recall from one shipment of goods can cost a company millions. A recent case that was made into a global news story would be with Mattel- a famed toy company. Mattel ended up losing millions of dollars due to a single recall that affected millions of toys that were shipped from China. Not only does Mattel lose out on profits, but also on the lack of trust that is now instilled in consumers who were once fans of Mattel's commitment to excellence.
Since China does indeed have cheap labor, most of the workers are considered to be replaceable. This fact doesn't bode well with businesses who have products that are tough to create, since workers will have to be trained over a long period of time in order to manufacture it. If you do find a manufacturer with a high turnover of employees, you are at worse odds of actually finding a logistics operation that is going to be efficient and adhere to strict deadlines.
Some consumers have a strong sense of patriotism- meaning they won't buy products from other nations if their own nation is in economic turmoil. Businesses can actually miss their target market if they outsource their logistics to other countries in this case. When dealing with expensive products such as vehicles or farm equipment, even a small dip in sales can mean trouble for a business outsourcing their operations to China.
Final Thoughts
Even though there are some negative aspects of outsourcing your operations, the goal to move logistics operations to China is still worthwhile for some businesses. You should speak with a logistics company for more information on what you should do in your situation. - 23217
The first reason businesses want to move their logistics operations is because of the lack of management. By outsourcing your logistics to another country, you will also have to send management staff to the country to ensure proper management of the production process. This isn't feasible for medium-sized businesses who don't have the personnel to perform such an act.
We all know what the oil and gas crisis has led to- increased costs associated with travel. This is bad news for businesses who already have logistics operations in China, since they will now be paying more for the same outsourced services. Things aren't expected to get much better until new modes of fuel and transportation are created. Until then, it isn't as cost effective as it once was to outsource to China.
A single recall from one shipment of goods can cost a company millions. A recent case that was made into a global news story would be with Mattel- a famed toy company. Mattel ended up losing millions of dollars due to a single recall that affected millions of toys that were shipped from China. Not only does Mattel lose out on profits, but also on the lack of trust that is now instilled in consumers who were once fans of Mattel's commitment to excellence.
Since China does indeed have cheap labor, most of the workers are considered to be replaceable. This fact doesn't bode well with businesses who have products that are tough to create, since workers will have to be trained over a long period of time in order to manufacture it. If you do find a manufacturer with a high turnover of employees, you are at worse odds of actually finding a logistics operation that is going to be efficient and adhere to strict deadlines.
Some consumers have a strong sense of patriotism- meaning they won't buy products from other nations if their own nation is in economic turmoil. Businesses can actually miss their target market if they outsource their logistics to other countries in this case. When dealing with expensive products such as vehicles or farm equipment, even a small dip in sales can mean trouble for a business outsourcing their operations to China.
Final Thoughts
Even though there are some negative aspects of outsourcing your operations, the goal to move logistics operations to China is still worthwhile for some businesses. You should speak with a logistics company for more information on what you should do in your situation. - 23217
posted by X - Men @ 3:55 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home