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Why is it not Easy to Move Electronic Manufacturing from China?

Thousands of companies mull China exit after Covid; India next ...
credits: Republic India News Channel
There has been a growing sentiment of going against China due to the ongoing pandemic situation all over the world. It's moving from being just a sentiment to actually inflicting economic attacks on the largest populated country in the world. Major companies like Samsung,Apple,KIA Motors, etc are trying to shift their supply chains from China to countries like India, South Korea, Indonesia and Vietnam. It's just not easy to shift massive legacy stable supply chain in a jiffy ! Here are some of the top 3 Reasons : 
1. Cost and Setup :
China provides a large area of its land for manufacturing and along with that provides cheap labor. Whichever industry you pick up the bare metal parts are manufactured in China and the costs involved in manufacturing have already offset the R&D costs which is the primary target for any company, 
US COVID-19 propaganda fuels anti-China sentiment - Global Times
credits-Global Times

2. Well Established Supply Chain :
Due to its decades of experience in setting up systematic supply chain across industries, China has managed to lure all the major companies to setup factories over there. Coupled with the skilled labor and domain specific expertise they are able to scale up the manufacturing and shipping as required.

3. Setting up Time :
Unlike other sectors, manufacturing factories need time to setup right from acquiring the land and getting through all sort of bureaucratic hindrances, companies simply can't wait for such long duration. Moreover, hiring and training to match the Chinese labor is daunting task in itself.
Taiwan Rallies for Hong Kong to Resist Beijing's Influence - WSJ 
credits- Wall Street Journal
What I feel would happen is, companies would plan to continue operations in China and start setting up small supply chain units elsewhere around the globe. This would help them get the supply chain setup in diversified manner while still maintaining their margins and meeting the demand. Companies have definitely realized the need to diversify the reliance on China for all kinds of products and become self sufficient (#Aatmanirbhar :P) Moreover, the anti China sentiment is a sentiment that is situation driven and there's no way to tell if it would dwindle down once the "normal" routine is back.  Do you think companies should move their manufacturing bases to other Countries ?

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Comments

  1. Kunal SenGupta18 May 2020 at 06:28

    Partially agree with your statement. It's true that Manufacturers need to establish alternate hubs before discontinuing with China. But this time we shouldn't take the Anti China sentiment so lightly. More so because It's Global sentiment and not just Indian. Remember that people in countries like Japan still don't buy USA products. Even if a fraction of Indian population stops buying Made in China products or even products of Chinese companies. I think that would also matter. This sort of an sentiment has never occurred around the world against China. as This sort of a pandemic has never happened in our life before.

    ReplyDelete
  2. Kajolll18 May 2020 at 07:06

    Wow nice content... Boycott Chinese.!!

    ReplyDelete
  3. NOAH2 January 2021 at 23:56

    Agreement manufacturing requires clear expectations to keep the undertaking centered and to oversee it without any problem. https://europa-road.eu/hu/gyors-nemzetkozi-fuvarozas-furgonnal.php

    ReplyDelete
  4. david14 June 2021 at 04:19

    This should be possible through Lean Manufacturing zeroing in on decreasing expenses, improving quality, expanding efficiency and better data sharing, smoothed out activities and incredible cooperation, centered, designated measure improvement. Emergency Water Storage Bladders manufacturer

    ReplyDelete
  5. CuzTox24 June 2021 at 23:08

    With summer drawing nearer, and numerous organizations preparing for the mid year, we either needed to make a union with organizations who offered the things we were on prepared for, or head back to the vendor and request another machine. this guide

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