Why Businesses Are Moving Logistics Operations Out Of China
Outsourcing your manufacturing process to another country such as China will allow you to gain an increase in cost to profit efficiency. With your costs dropped to a new low, you will be able to better compete with rival businesses and stay afloat. China has always been a great country to outsource to, but lately has not been so ideal.
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.
Transportation costs have made shipping products to or from China more costly than normal. With the high level of cost efficiency slowly waning, businesses are looking for other alternatives to China-based manufacturers. Gas and oil prices seem to be climbing steadily each year that passes, so it doesn't seem that things will get better any time soon for logistics operations in the area.
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.
The products you require to be made will vary in their level of skill necessary to manufacture. Employees that are new must learn how to create the product according to a certain level of quality. In the case of a product that is hard to create, the amount of time required for each employee to be educated can be too great to make deadlines, when considering a high employee turnover rate.
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.
In Conclusion
Outsourcing your logistics operations to China can still be a good thing- but be careful with the process less you create more problems than solutions. Ask a third party logistics dealer on their recommendations if you are at a loss of what to do at this time. - 23218
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.
Transportation costs have made shipping products to or from China more costly than normal. With the high level of cost efficiency slowly waning, businesses are looking for other alternatives to China-based manufacturers. Gas and oil prices seem to be climbing steadily each year that passes, so it doesn't seem that things will get better any time soon for logistics operations in the area.
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.
The products you require to be made will vary in their level of skill necessary to manufacture. Employees that are new must learn how to create the product according to a certain level of quality. In the case of a product that is hard to create, the amount of time required for each employee to be educated can be too great to make deadlines, when considering a high employee turnover rate.
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.
In Conclusion
Outsourcing your logistics operations to China can still be a good thing- but be careful with the process less you create more problems than solutions. Ask a third party logistics dealer on their recommendations if you are at a loss of what to do at this time. - 23218

