Outsourcing to China-not if, but when.

For a man who flew in from Hong-Kong in the wee small hours, Cheng Yoe is already firing on all cylinders, “I took a three-hour train ride into Shanghai, yesterday” he recalls, “and it’s amazing, all along the route, the countryside is being ripped up to make way for industrial plant, the rate of expansion is phenomenal.” He leans back in his chair to make a point, “ Everyone knows how fast the consumer market is expanding in China, but that is good for Europe; the only way it (China) can fuel its demand for goods is by exporting, it needs hard currency.” Quality in production capability is just one of the queries potential customers address when looking at outsourcing to China, Commercial Manager Andrew Ferrier acknowledges that it is a young country in terms of establishing heavyweight manufacturing credentials, “There is still a problem in kicking off the stigma of ‘made in China’, but I think that’s being redressed. The adoption of six sigma as a method of controlling quality control with a structured management process, and the way that companies with ambition are looking at best practices of other offshore countries so they can demonstrate they have a structure in place that complements for example what the U.S wants, shows the way forward. There is a great deal of hand-holding as America and Japan recognise that low cost manufacture in China can also offer potentially very high quality and they have two choices; a) not to bother or, b) drag the Chinese company through the process and nurture talent to develop the right infra-structure and culture. It’s nothing new, exactly the same thing happened in other parts of South East Asia over the past 20 years.” Yoe picks up the thread, “You only have to look at the number of large distributors setting up hubs in Hong Kong to see how significant manufacturing in China is progressing. PCB assembly is the biggest cost involved in production, so if companies can outsource this aspect and then do final assembly here in the UK it can be classified as made in the UK. That’s great for big companies, but it’s widening the gap between them and smaller concerns who can’t make that investment in employing an Outsourcing Department; there is a huge desire from UK companies to deal with China, but they’re unsure of how to find the right partner, and of course that’s where we come in!” he roars laughing, “we are dealing with more enquiries than ever, because we’re all about cutting through the problems and giving customers a shorter time to market with a more streamlined cost; as much as people may make a moral case for wanting to keep manufacturing.

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