[–] RedditDead2005-2015 1 points 5 points (+6|-1) ago 

Pretty chart, but it's bullshit. Common sense tells you that $1/hour Chinese labor with no unions and benefits is going to cost less than a minimum $8/hour which includes benefits, mandatory employer contributions to Social Security, etc. This doesn't even include the federal regulations and their costs regarding safety, waste disposal, etc. Automation lessens the impact of labor costs, but not that much.

[–] ReadShift 0 points 2 points (+2|-0) ago 

A long time ago I read something similar, that the difference in manufacturing costs between China and the US were actually pretty small. The large difference, the article contended, was in making changes to the manufacturing process. The claim was that is was much more difficult to change anything about your product in the US, whereas in China you could have a modified product in as little as two weeks. I'll try and find the article.

[–] pinkmagnet 0 points 0 points (+0|-0) ago 

I read something completely opposite on an AMA maybe 5-7 years ago. The guy said that changing the product was much faster as well as the lead times to get it produced. He also claimed that it was way less likely that your design would get stolen and created into a bootleg.

Continue this thread →

[–] 11amDrunk 0 points 1 points (+1|-0) ago 

As someone who works in industry, I can tell you that it is indeed correct. The problem with Chinese manufacturers is that the logistics required to make a product overseas by a workforce that doesn't speak your language is quite incredible and is very costly to American companies. One example I can recall offhand is a sub-assembly we purchased from one of our Canadian suppliers. We had a defect where vibrations caused screws to come loose which would then cause catastrophic failure of the sub-assembly and other nearby sub-assemblies due to an electric motor spinning at 5000RPM without being secured. Now this was quite a simple fix, either a dab of loctite on the screws or applying a standardized torque to the fastener. But the problem arose from the supply chain. We bought the completed sub-assembly from a Canadian supplier, who bought the unfinished assembly from a Dutch supplier who had passable English, to a Chinese manufacturer that communicated in Mandarin and incredibly poor English. After 90 days of exchanged emails, we never saw a corrective action implemented by any level of our suppliers and had to turn our temporary measure of applying loctite at our factory into a permanent one. If our supplier was located in the US, we would have never had the language barrier or the incredible time delay in hearing any sort of response.

Hell, we could have even just visited the supplier ourselves. Something we try to do at least once every 3 years with all of our American suppliers. I couldn't even begin to estimate how much we've spent on sending engineers to Europe or South America to troubleshoot an issue with suppliers' manufacturing issues. And depending on the part, you may run into issues with Customs which we had a nightmare with, even with just our Canadian suppliers.

So in short, China may "theoretically" produce parts cheaper when you analyze by a cost-per-part basis. But when you figure in lead-times, freight costs & logistics, and every day production hiccups, it ends up being a hell of a lot cheaper to produce in America. Time is money.

[–] senpaithatignoresyou 0 points 0 points (+0|-0) ago 

You are forgetting about the rest of the supply chain. Labor is just one part of manufacturing.

We also have materials, machine hours, shipping, and stocking.

It takes time to ship a product out of some province in china, across the pacific, unload it in California, then load it onto a truck, and ship it to the store.

When gas is expensive, the shipping costs go up. When the dockworkers get a raise, the shipping price goes up.

So between the Chinese wage increase, dock worker pay, and gas increase, companies are starting to see their profits shrink from outsourced labor.

and this is just a simplification of the problems.

[–] yewbontheboat 0 points 1 points (+1|-0) ago 

I'm an American electronics manufacturer and it's true raw costs to manufacture even with higher per worker pay are similar, and product life cycle turn is much faster than china.

People here fail to realize there is a huge difference between foxconn and 99% of Chinese manufacturers.

[–] pilgrimboy14 0 points 2 points (+2|-0) ago 

So why do people choose China to make their products?

[–] ViolentlyMasticates 0 points 1 points (+1|-0) ago 

Already established factories, ports, and entire cities dedicated to it. It's easier for smaller stuff that you don't want to build a dedicated factory for.

America tried to stop being a manufacturing state a long while ago, so those pieces of infrastructure are now long underfunded and often in disrepair. Honestly, I think manufacturing may revitalize their economy.

[–] yewbontheboat 0 points 1 points (+1|-0) ago  (last edited ago)

For my industry?

They used to be able to make the product for 70% cheaper, but due to equipment advances and rising labor costs in china for some products I can beat Chinese prices, everything else I can get within 10%

What was true 2 years ago is not true today.

[–] MacHinery 0 points 1 points (+1|-0) ago  (last edited ago)

Powerful simulators are used to model these systems.

There is very little ACTUAL mystery within the corporate machine as to the consequences of actions. It merely does not care.

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