We hear about it all the time. On tv, websites or on covers of newspapers in our grocery stores; manufacturing is nearly gone in the US. The perception is that overseas, especially in places like China, it’s just cheaper to produce your goods. Lower wages, more workers and cheaper cost of goods. BUT, that’s not the case anymore. Let’s go over some myths you may have heard recently about electronic manufacturing and why Conelec can compete with anyone when it comes to price and quality.
Myth: All US-based companies are moving manufacturing overseas.
This may have been more true 10 years ago but with recent reports talking about the growing number of companies expanding their capabilities stateside:
U.S. firms that have long operated abroad are making similar moves: Caterpillar, GE and Ford are among those that have announced that they’re shifting some manufacturing operations back to the United States. And economists are signaling the beginning of a major renaissances for American manufacturing. – Washington Post
What does this mean for you? IF you were considering producing a product stateside, you can now feel reassured that the product can be produced at an affordable rate and will be more readily available for inventory purposes.
Myth: Workers are way cheaper in China than the U.S.
Back in 2006, the gap between workers was about $17 dollars. Pretty substantial amount. But as of 2015, the gap has shrunk to $7 bucks. This mostly from the increased wealth of China and the demand of workers for more money. Dan North, an economist talks about companies thought process with the lower gap between countries:
If you’re a U.S. company and the advantage is only $7 per hour, suddenly it may be worth staying home,” North says. “If I stay here, I have lower inventory costs, lower transportation costs. I’m closer to my market, I can have higher-quality production and I can keep my technology.
There’s a lot of things that go into making a decision on where to produce goods but quality should always be on your mind. Being able to walk the plant producing your goods should always be on your mind. Being able to pull inventory affordably off the shelf should always be available. You never know what your demand forecast can change to and having some stateside (hi!) can help save you money and save you headaches.
Myth: It’s cheaper to produce goods in Europe or Japan.
Another case of maybe in the past but many companies are moving their operations to the States for cost-cutting. IKEA just opened up a facility in Virginia to cut shipping costs. Nissan, Honda, and Toyota are ramping up their exports.
Myth: The US is dominated by big manufacturing companies that drive costs up.
In the past, companies like Dupont would handle every aspect of production – but now with so many smaller companies springing up and having success. A compete landscape is better for everyone. Especially those looking to produce their goods stateside.
We want to be your electronic manufacturer. Come for a tour of our facility. We know once you see it, meet our team and hear our strategy to produce the highest quality product for your business— you’ll choose us for all your needs. Call us today: 386-873-3800 or email: email@example.com.