Why Businesses Are Moving Logistics Operations Out Of China
Manufacturing goods takes a lot of money, and transporting them can be just as costly. Businesses can cut down on their costs by outsourcing operations to China, which is known for its low labor costs. Regardless of this fact, some businesses are now finding that their third party logistics operations are best outsourced to other places.
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.
We all know what the oil and gas crisis has led to- increased costs associated with travel. This is bad news for businesses who already have logistics operations in China, since they will now be paying more for the same outsourced services. Things aren't expected to get much better until new modes of fuel and transportation are created. Until then, it isn't as cost effective as it once was to outsource to China.
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.
Since China does indeed have cheap labor, most of the workers are considered to be replaceable. This fact doesn't bode well with businesses who have products that are tough to create, since workers will have to be trained over a long period of time in order to manufacture it. If you do find a manufacturer with a high turnover of employees, you are at worse odds of actually finding a logistics operation that is going to be efficient and adhere to strict deadlines.
Never underestimate the power of a patriot. Citizens with a strong sense of national pride will sometimes only buy products that are created and shipped within one's own home country. While it may seem that this only affects a small market percentage, for some products it could mean the failure or success of a business. Researching your target market is important in this case if you are going to estimate real sales and profits.
Final Thoughts
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. - 23200
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.
We all know what the oil and gas crisis has led to- increased costs associated with travel. This is bad news for businesses who already have logistics operations in China, since they will now be paying more for the same outsourced services. Things aren't expected to get much better until new modes of fuel and transportation are created. Until then, it isn't as cost effective as it once was to outsource to China.
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.
Since China does indeed have cheap labor, most of the workers are considered to be replaceable. This fact doesn't bode well with businesses who have products that are tough to create, since workers will have to be trained over a long period of time in order to manufacture it. If you do find a manufacturer with a high turnover of employees, you are at worse odds of actually finding a logistics operation that is going to be efficient and adhere to strict deadlines.
Never underestimate the power of a patriot. Citizens with a strong sense of national pride will sometimes only buy products that are created and shipped within one's own home country. While it may seem that this only affects a small market percentage, for some products it could mean the failure or success of a business. Researching your target market is important in this case if you are going to estimate real sales and profits.
Final Thoughts
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. - 23200
posted by X - Men @ 3:45 AM
1 Comments
1 Comments:
Completely agree... third party logistics operations help companies to increase their business with best outsourced to other places. Thanks for sharing
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