Made In China

Made in China Phenomenon

China is now the production super house of the world, and the world has a lot to learn from the supply chain management challenges of this amazing emerging economy.
It is worth researching on how Western management thinking and practices as well as ERP technology can enhance China's production supremacy.

a) High volume, low cost and reasonably good quality
The dominance of the Made in China products has made "Everyday Low Price" possible for most of the supermarkets and hypermarkets. It does appear that this phenomenon is unstoppable at the moment.

With more than 1.2 billion people to feed, China have to use the simple law of material conversion or transformation, to produce products in high volume, low costs and of reasonable good quality to be sold in any parties on a willing buyer willing seller basis.

A very important corporate strategy is to sell products to the customer with the focus on the basic objectives of quality, cost, delivery, flexibility and service. The supply chain strategy has been centred around the 24/7/365 modus operandi to maximise machine utilisation and labour efficiency.

The interesting development is China's ability to attract billions of dollars of foreign direct investment yearly with very competitive incentives and the opportunity of penetrating the domestic market itself. The foreign investment has also help to produce the much needed human capital to sustain the enviable economic growth.

The dis-satisfaction of a portion of the Tibetan population, the earthquake in Sichuan, and other recurring flood problems have put China to test. However, they have sufficient resources to overcome or contain the issues at hand without external help. This self reliance is in itself a very important national pride.

b) China versus the rest of the world
The WTO,s Doha Round and subsequent roundtables on the move towards globalisation and trade liberalisation may be a distinctive advantage to China.

The trade liberalisation of garment and textile nearly crippled Sri Lanka, Bangladesh and some other smaller economies. Without interference from USA and EU, China would have virtually total control of the global market. After intensive negoatiation, some form of quota system has to be implemented to allow other countries the chance to survive through export.

In the foreseeable future, it is unthinkable to allow trade liberalisation of any other industrial sector. As a result, the compromised interim solution is to have nation-to-nation free trade agreement (FTA) to allow for some form of regulated liberalisation.

c) Ensuring high employment rate
The life expectancy of the people of China is increasing, and is a real cause of concern. This is further complicated by the one-child per family policy resulting in a very obvious ageing population.

The government of the day must keep reinventing to ensure high employment rate, so that the people do not become a liability in the socialist system. In certain part of China, it is a challenging task to motivate people to work and earn less if they were to be unemployed.

d) Efficiency and effectiveness of supply chain management (SCM)
There are grouses and complaints about the Logistics and SCM in China, but the consolation is that the goods eventually reach the intended destinations.

The Western management believes in the heavy usage and reliance on information and communications technologies, China has an abundance of affordable human resources to get things done albeit slightly slower than expected.

There is also the contention that ICT can enhance the speed and efficiency of mundane transaction and routine processing, but it may not provide the effectiveness.

Perhaps when it comes to creativity and innovation in logistics and SCM, the human factor is critical for decision making.