When considering how to distinguish your product from your competitors many factors come into play like price, quality and features. How can you stand out and how can you be the next big seller? Being dominant in one of these fields can help your sales, but why not try to take the lead and be dominant in an emerging field? 3D technology is continuing to evolve and is now at a stage where it is being integrated into consumer products. This has made the UI space really exciting and is somewhere smart devices can take advantage of. Microchips GestIC technology takes a new approach to 3D gesture control and uses E-field electro magnetics, is low cost and with some basic implementation will turn your smart device into a truly unique UI experience.
Over 40 years ago when Microsoft launched the mouse, it revolutionized the way in which humans communicated with the PC: Then, 15 years later, touch technology was introduced to the mass market and continues to dominate the way we interact with our devices. 3D is the logical step forward in the interaction evolution. Now is the time for these new developments to happen and its the companies today that innovate that will be the leaders in the future.
Check out Microchips concept Windows 8 keyboard one of thousands of different uses for this 3D gesture technology.
There are many reasons you should consider transferring your OEM manufacture to China, particularly if you are involved in the area of consumer electronic equipment. The main incentives, however, are the low-labor costs and the wealth of manufacturing experience and expertise that exists within the country.
But before you begin to outsource your OEM manufacturing, there are certain aspects you really need to consider. These are areas which will help you to find the best possible OEM manufacturing solution for your particular circumstances.
Here’s a guide to help find out what’s going to work for you.
Have you defined your problem?
If you haven’t defined the problems you are looking to solve through outsourcing, then it’s likely that your OEM manufacturing arrangement isn’t going to deliver the best value for money.
You’ll want input from across your organization to do this in an effective manner and to answer questions like, “What technologies will the OEM supplier need, to make your product in the right way?”, “What after sales support is available if, or when, problems arise?”, “How will you integrate the manufacturer into your supply chain?”
The best possible supplier will add value by making their strengths compensate for your weaknesses and enable you to de-emphasize or eliminate internal issues.
Have you done your due diligence?
It’s easy to be overwhelmed by options when looking to outsource your OEM manufacturing and it’s easier still to get so focused on price that you don’t do your homework on the suppliers.
Cost is only a part of the equation for choosing a successful OEM supplier. It’s just as important to work with a partner that understands you and your business, can guarantee a quality output and has a successful track record of working in your industry and providing real-life solutions to business problems.
You need to involve the right people from your organization to ask the right questions, and find the right supplier to respond to their needs, not just in a meeting but all the way through the design, production and delivery of your OEM products.
Have you picked the right product at the right time?
ODM manufacturing (Original Design Manufacturing) can help you eliminate some of the risks associated with tying up internal resources, but OEM manufacturing means outsourcing some of an established product range or branding an already existing product.
It’s important to start with the right product and trial the process, learning to work with your OEM provider in the most efficient way possible before you expand the program to other products.
When you do this it’s also important to communicate your OEM product road map, so that your OEM supplier can understand the process from their own point of view too. A small scale project may not cause a rush of attention with an OEM manufacturer but a an OEM manufacturing management company will often be only too pleased to assist as long as they know there will be long-term returns for them and for you.
Have you defined your internal OEM management processes?
One of the potential areas that can cause an outsourcing relationship to fail is having too many people on your end handing out instructions piece-meal to your OEM supplier. That’s because it leads to confusion regarding objectives and raises the risk of poor communication on the part of both sides in the arrangement.
It’s best to allocate a single point of contact at your company and for the OEM manufacturer to offer the same in return. The management and communication process should be outlined either in a memorandum of understanding or contractually, so the proper level of responsibility can be assumed by both sides of the arrangement.
Are you just chasing price?
Sometimes if the price appears to be too good to be true, it really is. It’s important to secure a relationship which improve your profit lines but still enables the OEM supplier to make a profit too. This means that your business will always be a priority and given the attention that it deserves. If the OEM manufacturer isn’t making money then you face some potentially disastrous consequences – the provider may go into insolvency with you losing any investment you have with them, or they may deprioritize your business when better opportunities arose. Worse still; they may close their arrangement with you and leave you floundering for another supplier.
SZCEIT understands exactly how OEM manufacturing in China can be of great benefit to your business, and can work with you to help you get the best value from the process.
There has been a great deal of media interest in the idea that manufacturing in China is starting to become less appealing to Western companies. There has been speculation that wage cost advantages will gradually erode and that perceptions of poor quality and business environments will drive production back home.
What this speculation fails to take into account, however, is one of the main advantages that China holds; something which is unaffected by any of these factors – the proximity of the supply chain. What many people think of as ‘manufacturing’ is more along the lines of assembly – the individual components are manufactured separately, possibly in many different factories, and then assembled into the finished product by another manufacturer.
It’s not just assembly work that has been outsourced around the world; it’s also the individual component production. Now, it’s true to say that not all of that production has moved to China, but it’s also worth recognizing that the vast majority of components are produced in Asia. South Korea and Taiwan have made big gains based on successful production of components and even countries like Thailand and Malaysia have started to get in on the act.
China also has many factories dedicated to component manufacture and this is where one of the key advantages comes from for Chinese companies. If manufacturing moves back to the West, it means that assembly will move back first. This puts Western organizations at a huge disadvantage, particularly in the United States, because it places them a long way from the companies that will make the components for their products.
In terms of production times, this may be a fatal error. If a Shenzhen based manufacturer buys its components locally and there’s a problem, it’s easy to instigate return processes. It’s also cheap in terms of logistics as the goods don’t have to move very far to be returned. A face-to-face meeting enables problems to be overcome quickly with the minimum amount of disruption to the deadlines for delivery.
For an American manufacturer they’ll need to be able to communicate at a local level with their component providers and deal with all of the associated language and cultural barriers. Then they’ll need to ship their returns overseas back to Asia (which is expensive and time consuming in itself). They’ll have to hope that the supplier understands their issue and is willing to remedy it quickly, which they may or may not be willing to do without a whole heck of encouragement. And then they have to wait for the next shipment to arrive – costing more time, more money – before they can test to see if the problem has actually been resolved.
Another factor to consider is that the wage differentials aren’t as close as those reported in the media. The figures for median and average wages in Chinese manufacturing aren’t anywhere near as high as those shown in some of the figures claimed in Western media. But even if they were, Chinese manufacturers have a serious competitive edge in their proximity to the supply chain – one that the West would need decades to overcome.
So the bottom line is, don’t bet the farm on a manufacturing exodus from China any time soon.
SZCEIT can help you come to an understanding of how manufacturing your products in China can save you time and money while maintaining the quality your customers have come to expect from your brand.
On reading his obituary in the New York Journal, Mark Twain quipped, “Reports of my demise have been greatly exaggerated.” China may soon find itself having to make statements of a similar nature. Commentators in the West have been excitedly predicting that manufacturing will return to the West as costs rise in China.
It is true that labor costs are rising in China, and have been for a number of years, but does that automatically mean that companies will suddenly up sticks and come running back to produce goods in Europe and the United States?
We don’t think so and here’s our list of reasons why:
Abundance of low cost product development in China – China’s universities are dedicated to churning out skilled engineers of all disciplines to support their factory-based economy. Over in the West engineering skills have long been in decline, and that skillset can’t be rebuilt overnight.
Experience matters – China is the world’s manufacturer, every town and city has an industrial base or bases and that means there’s a large experienced workforce waiting to be called-up; the West simply doesn’t have this level of expertise anymore and it won’t be easy to “poach” Chinese experience because most Chinese factory workers don’t speak a word of English and most Western factory managers won’t have spent their time learning Mandarin.
Inefficiency – Unlike Western and Japanese companies, China is still yet to undergo its “quality revolution” which, when it comes, will enable cost savings at all levels of manufacturing and take Chinese products to the next level in consumers’ eyes.
Wage models – The data supplied in the current predictions of manufacturing returning to the West is suspect at best, it usually refers to “skilled labor” and as much of manufacturing runs on “unskilled labor” it puts a very positive slant on the distribution of income. Some reports have put Chinese labor costs at only half of American or European labor costs – in that case they’re going to be disappointed to learn that the majority of workers in Chinese factories earn around $250 USD a month and that’s more like 1/8th of the cost of labor in the West.
Even if the predictions were true, and Chinese manufacturing was suddenly to become cost-ineffective when compared to the West, what is the likelihood that manufacturers would return en-masse to producing products in Europe and the United States? Given that labor costs in other developing nations are still extremely low, isn’t it more likely that those jobs would move on to Cambodia, Vietnam, Thailand, Bangladesh etc?
At SZCEIT we approach client’s manufacturing needs rationally and, at the moment, the costs of Chinese manufacturing are more competitive than in the West; quality can be easily achieved if you have the right relationships with the producers and that means big advantages for you and your customers.
