At Foo Camp 2010, I caught up with Liam Casey of PCH International, an Irishman living in China who runs a supply-chain business, helping mostly American tech companies manufacture things in China. Casey offers his insight into why China has become the place to make things. China has the infrastructure, the expertise and the labor force to be the world’s leader in manufacturing.
Casey’s view is that manufacturing has become a commodity; fewer large companies own their own factories. In a sense, they rent rather than own, and the cheapest places to rent are those in China. As China begins to create web interfaces to its manufacturing capacity, the rest of the world will find it even easier to make things in China.
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4 Comments
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And this is really sad when you consider that China has still yet to learn about such terms such as "metrology" and "quality control".
I also wonder how long China manufacturing will remain viable due to increasing transportation costs and transportation infrastructure vulnerability/reliability issues.
As Makers, we should be looking at localized, resilient, sustainable manufacturing infrastructure.
I agree with Ticom, the strength of the US economy has been manufacturing. The fall of the Roman empire was in part due to outsourcing their greatest strength (military), which enable a takeover using their own tactics.
I have a feeling that as China does begin to learn about things like metrology and Q/A, the prices will start to go up (and rightly so). An increasing cost of living, along with the ever-gaining worker’s rights movement and adherence to stricter safety standards (definitely a good thing) will result in higher wages for employees. Truth be told, wages and costs don’t have to increase much before they negate the “savings” of producing goods in China.
Couple that with the fact that everything you build there has to spend 4 weeks in an ISO container before you can use it (or sell it), and China doesn’t look so much like the promised land anymore.
And then you have the competition problem. When China takes all these lessons that it’s learned building stuff for us, and starts using it to build their OWN stuff… look out.
This, I feel, is the real reason why the Maker movement is good for America. We need to be able to create on our own terms, with our own skills, from top to bottom. It’s clear that many of our educational institutions are myopically obsessed with training us for jobs that don’t actually PRODUCE anything but wastepaper, so it’s up to us to learn it ourselves.
I brought this soapbox in case anybody wants to use it.
I wholeheartedly agree with the Maker mentality thats swelling in the US. Its great because it gets us back to our roots. I’ve always felt that America’s greatest asset was its creativity. Granted we have a large manufacturing base, but without the creativity and the ingenuity there would be no manufacturing.
I’m a bit on the fence when it comes to China. i myself have been leveraging chinese manufacturers for components in a product i hope to bring to market. I initially tried to source and have all my parts manufactured here, but the responses that I got consisted of the following. A.) no response B.) You dont meet our MOQ C.) the cost was too prohibitive.
When i’ve dealt with the Chinese, they’ve been eager to help me out no matter what my initial quantity purchase was.
Its hard to develop a product thats manufactured in the US with US sourced parts because there arent too many shops that can take on small runs.
Back to my main point, which is the US/China production relationship. If we focus on the stuff that we excel at, we can leverage what the Chinese are doing well. Manufacturing will always find the lowest labor to exploit. Once Chinese manufacturing costs rise, new shops will spring up in other under developed countries. Some may see this as labor exploitation, which to an extent it is, but that initial influx of jobs helps lend a hand to people out of poverty. Eventually they organize and educate themselves which leads to a demand for better wages and working conditions. Eventually they will model the 1st world.
If the US would like to keep all of this in house then we need to move as a society towards a more knowledge based society with less emphasis on the physical making. Lets produce the robots and automation systems to crank the products out. Lets get into rapid prototyping.
Yes, i’m well aware of the huge elephant in the room, which is the education system here. Even though our formal education system in the US is lacking, the internet has lead to a huge growth in self paced learning. Sites like this, help teach people new skills, forum contributers with their constructive feedback and sources for further knowledge acquisition propel the interested individual to actually learning new subject matters. Maybe our schools suck, but everyone with more knowledge than a less knowledgeable person is a teacher. If we maintain the drive to learn there will always be teachers.
I’m sorry, I havent been on a soapbox in awhile. thnx.