tag:blogger.com,1999:blog-13887692.post8152385204018647873..comments2024-03-21T03:15:06.288-04:00Comments on Cozy Beehive: Cervelo's Compete on Quality StrategyRon Georgehttp://www.blogger.com/profile/18394865788996482667noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-13887692.post-25275787407139490502008-01-21T16:48:00.000-05:002008-01-21T16:48:00.000-05:00Cheap labor is not the only issue for moving plant...Cheap labor is not the only issue for moving plants overseas.<BR/><BR/>Bicycle companies like to be close to other bicycle manufacturers that will buy its products, and if they are there, the move will be perhaps a nice one. I can give an example of RockShox who made a move to Taiwan for the same reason.Ron Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-72994714721011096532008-01-20T18:54:00.000-05:002008-01-20T18:54:00.000-05:00Curiouscat,Its nice to see you've been reading as ...Curiouscat,<BR/><BR/>Its nice to see you've been reading as well. I believe that you've said the right thing. Cheap labor is not everything, but it is nevertheless an important factor in bringing costs down while keeping quality the same or more. It is a very interesting game that's going on and I'll try to reason why this is so :<BR/><BR/>1. China is state run and quite pro business. There seems to be a planned way to development.<BR/><BR/>2. China's infrastructure is very developed compared to other countries in the south Asian belt.<BR/><BR/>3. China opened its doors to FDI way before other countries (late 70's), now there are quite experienced suppliers in the country who understand how businesses in U.S are run, they understand ISO standards etc. (Thats being moot as we're understanding that some bad products are made in China as well)<BR/><BR/><BR/>4. China is a far more attractive than India perhaps for manufacturing because India is more geared towards the IT services industry. It is said that India's consumption of aluminum is about two pounds per person, compared with nine pounds per person in China.<BR/><BR/>5. The foreign investment pouring into China is far more than other countries, where red tape-ism has been getting in the way in the private sector.<BR/><BR/><BR/>You're right in saying that labor costs are not everything. That is all set to change as I hear that wages, especially in the rural areas of China, are steadily increasing. <BR/><BR/>I think in high wage countries, Toyota, while not particularly interested in lower wages, has an excellent production system and that keeps costs to a minimum. They have gone outside Japan and duplicated their manufacturing plants and their production ideas exactly. Theirs has been a model to follow for auto makers in the U.S.<BR/><BR/>I think China will exceed manufacturing in the U.S. The data you have provided is two years old.<BR/><BR/>Think about it.<BR/><BR/>1. China has the most number of people. Its amazing when you think of the number.<BR/><BR/>Chinese people are developing fast and are demanding more of everything, cars, computers, tvs, what not.<BR/><BR/>2. Steady oil cost increases for the U.S will ultimately slow down manufacturing unless they can get that oil cheaper, reduce transportation costs and what not from the supply chain.<BR/><BR/>It'll be interesting to see what happens in the next couple of years.Ron Georgehttps://www.blogger.com/profile/18394865788996482667noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-51783636249514377632008-01-20T13:55:00.000-05:002008-01-20T13:55:00.000-05:00Cheap labor is not the only criteria. It is one, ...Cheap labor is not the only criteria. It is one, that is true, but <A HREF="http://management.curiouscatblog.net/2008/01/15/top-10-manufacturing-countries-2006/" REL="nofollow">what country manufactures more than any other?</A> The USA. China is growing rapidly. China overtook Japan as in manufacturing only in 2006.<BR/><BR/>People focus far too much on cheap labor costs. China has had much cheaper labor for decades - only in the last 15 years have them gained manufacturing growth. There are huge amounts of cheap labor available in India, Nigeria, Vietnam, Brazil, Mexico... China is not just about cheap labor, they are successful by doing many things right. China needs to keep improving, as do all other countries.<BR/><BR/>It is just not true that a company can't successfully manufacture in high wage countries. Look at Toyota manufacturing in Japan and the USA (and many other countries too).<BR/><BR/>I talk about manufacturing on <A HREF="http://management.curiouscatblog.net/category/manufacturing/" REL="nofollow">my management improvement blog</A>.Curious Cathttps://www.blogger.com/profile/05269438998983808916noreply@blogger.comtag:blogger.com,1999:blog-13887692.post-18664664340047857942008-01-16T09:43:00.000-05:002008-01-16T09:43:00.000-05:00Being a news anchor, I have to read these stories ...Being a news anchor, I have to read these stories each time there's a recall. Last summer, after I cleaned out my son's Thomas The Train collection because of lead paint issues...I started checking everything around me. In most cases, our entire day is surrounded by products made in China. It's just mind boggling. I know there is quality there but it is hard to shake the worry.Anonymousnoreply@blogger.com