Manufacturing in China versus USA

[manuellynch]

I have been involved with a lot of technologies that have moved to China to reduce cost of manufacturing but am starting to see it turn back around.

The biggest problem is shipment time, communication, and interest in working on USA products. One vendor told me that there is a much bigger market for them in CHINA so they are going to focus on that first.

I think it is time the USA focus back on developing technologies that are intelligently engineered so that they could be made in the USA, keep more jobs in the USA, etc.

So I wanted to throw this out to the group - if you could purchase a technology that was MADE IN THE USA, cost the same as the other technologies, and you could get within 1-3 days of when you ordered it - wouldnt that be a bit more compelling?

[Travis]

I have been involved with a lot of technologies that have moved to China to reduce cost of manufacturing but am starting to see it turn back around.

The biggest problem is shipment time, communication, and interest in working on USA products. One vendor told me that there is a much bigger market for them in CHINA so they are going to focus on that first.

I think it is time the USA focus back on developing technologies that are intelligently engineered so that they could be made in the USA, keep more jobs in the USA, etc.

So I wanted to throw this out to the group - if you could purchase a technology that was MADE IN THE USA, cost the same as the other technologies, and you could get within 1-3 days of when you ordered it - wouldnt that be a bit more compelling?

I think that is a no brainer there.

[Erik Sine]

One of the common things I keep hearing on a repeat basis is that the US products been manufactured by the Chinese are good for the first couple of batches, then the rest go to crap

[manuellynch]

One of the common things I keep hearing on a repeat basis is that the US products been manufactured by the Chinese are good for the first couple of batches, then the rest go to crap

Very true - maintaining a consistent supply chain in China that makes the same thing "to spec" over and over is a challenge. It sounds a bit crazy but the difference between quality from Taiwan to China is incredibly different.

My bet is the next "China" is Vietnam.

[Travis]

One of the common things I keep hearing on a repeat basis is that the US products been manufactured by the Chinese are good for the first couple of batches, then the rest go to crap

Seems like that kind of goes along with the 'introductory' sales pitch. Such as the special introductory pricing or quantities and so on. Everything is exactly as you want it to start but once you get settled in pricing goes up, quantities reduce, quality goes away.

[manuellynch]

Seems like that kind of goes along with the 'introductory' sales pitch. Such as the special introductory pricing or quantities and so on. Everything is exactly as you want it to start but once you get settled in pricing goes up, quantities reduce, quality goes away.

Very true - I introduced one vendor to a customer that is taking a new product of ours into HOME DEPOT and the vendor subsequently raised his prices on something they had been supplying for some time.

I truly think there is a market for products that are smartly engineered and designed such that they can be built anywhere in the world cost effectively.

[manuellynch]

With shipping charges rising, the Chinese economy growing and prices rising, and with the possibility that NAFTA might be overturned by a potential democratic president...isnt there a great concern that the "low cost" benefit of Chinese manufacturing is going to go away rather quickly?

And with additional disease outbreaks will US customs be doing further inspections of products and delay deliveries?

Any feedback on recent experiences would be great.

[Freddy@NDS]

With shipping charges rising, the Chinese economy growing and prices rising, and with the possibility that NAFTA might be overturned by a potential democratic president...isnt there a great concern that the "low cost" benefit of Chinese manufacturing is going to go away rather quickly?

And with additional disease outbreaks will US customs be doing further inspections of products and delay deliveries?

Any feedback on recent experiences would be great.

NAFTA is far from going away regardless what any of the political people promise or say. If you saw the infrastructure over the border for manufacturing facilities you would soon realize that the threat of altering or overturning NAFTA is mute at best. China prices are going up and will keep on going up. As for the degrading Chinese quality over time - yup, very true indeed, seen it first hand on too many occasions.

[YYZ]

It's a funny thing about China. Let me share a little story...

In the fall of '06, we started development of a cove lighting product. This product would consist of a linear LED strip inside a clear acrylic extrusion, which gets mounted using a clear clip. We came up with our design and started searching for companies to A) extrude the tube and B) injection mold the clip. I set about contacting companies in our general area, as well as immediately neighboring provinces or states.

The tube turned out to be quite a problem. The first few companies I contacted said they couldn't even do it (the tube has features on the inside/hollow, which is difficult). A few others gave me insane pricing for the tooling ($20k+) and wouldn't touch the job for less than 25,000 feet of tube per order, at a cost of near $3.00 per foot - which was also way too high - not to mention the 10-12 week lead times. I finally found a company in the NE US who priced me around $12k for tooling, a more reasonable number for the actual tube, and was willing to do an opening order of 10,000 feet. I was ready to cut a PO, when th guy calls me to say their engineering dept thought it would be too difficult and they had to back out.

#!@%

So reluctantly, I start looking at China. I'm not opposed to buying globally, but since we don't sell bottom dollar products I felt producing it domestically was preferable, but in this case it wasn't even a realistic option. Within 3 days I had 3 willing suppliers. Needless to say, the tooling costs were significantly lower, as was the product itself. I can order as little as 1000 feet and have it in my hands in less than a month. As it stands, I order 10,000 feet at a time and ship it by sea, which still gets into our shop within 8 weeks, usually closer to 6.

The clip was easy enough and everyone I contacted could do it, but few were interested in our volumes and in all cases, tooling costs were unreal. I expanded the search and got about a dozen quotes, none that I felt were reasonable for the part we were making... so, through my extruding contact, I get several Chinese suppliers who are eager to do the work. Within 3 weeks I get production samples and 3 weeks later, I have 10,000 pcs sitting in my warehouse.

You tell me - who is doing more to get my business? I have to say that I'm happy with the quality of the parts also.

That said - we still produce everything else here in Toronto. Circuit boards, assembly, coating, all of it. I want control over parts and quality, so we pay more to do it here. I'm not opposed to doing certain items in China and have a trip scheduled to meet with several current and potential suppliers (plastics, aluminum castings, glass lenses, etc). In all likelihood, we'll keep sourcing "parts" overseas and do all the final assembly and testing here, but certain products that we expect to become high volume, I would set up an assembly facility of our own to handle nothing but our own products and maintain full control over parts used, etc...

I also agree with Freddy regarding NAFTA. There's a lot of Democratic hot air right now and the likelihood that NAFTA gets re-opened or repealed is almost zero. That said, what does NAFTA (North American Free Trade Act) have to do with China to begin with?

[manuellynch]

totally agree with you...on some products it makes sense.

Just as you see on this board on a regular basis - right light for the application - right supplier for right product.

[YYZ]

So I just got back from a week in China and my opinion remains the same. The factories there can be hit-and-miss, as you have to have confidence in who you are dealing with - that you will get consistency and quality over the long term - but they continue to do more for less. I spent time in 5 cities in 3 provinces and saw no signs of what we westerners would consider "communism". It's as capitalist as any place I've seen here, including private health insurance, toll roads, home based businesses - the whole bit.

Also - I'll be starting a new thread once I get my pictures and video clips saved - primarily from Shanghai where the neon signs are pretty spectacular. Some of you tube guys will enjoy the photos.

[manuellynch]

So I just got back from a week in China and my opinion remains the same. The factories there can be hit-and-miss, as you have to have confidence in who you are dealing with - that you will get consistency and quality over the long term - but they continue to do more for less. I spent time in 5 cities in 3 provinces and saw no signs of what we westerners would consider "communism". It's as capitalist as any place I've seen here, including private health insurance, toll roads, home based businesses - the whole bit.

Also - I'll be starting a new thread once I get my pictures and video clips saved - primarily from Shanghai where the neon signs are pretty spectacular. Some of you tube guys will enjoy the photos.

So what you are saying for those in neon world looking for work is to go take classes in Chinese and move to China???

[Erik Sine]

Thay have some awesome neon signs there, Japan too

[manuellynch]

So I just got back from a week in China and my opinion remains the same. The factories there can be hit-and-miss, as you have to have confidence in who you are dealing with - that you will get consistency and quality over the long term - but they continue to do more for less. I spent time in 5 cities in 3 provinces and saw no signs of what we westerners would consider "communism". It's as capitalist as any place I've seen here, including private health insurance, toll roads, home based businesses - the whole bit.

Also - I'll be starting a new thread once I get my pictures and video clips saved - primarily from Shanghai where the neon signs are pretty spectacular. Some of you tube guys will enjoy the photos.

Did you see any of the signs in Shanghai China moving to the Sloan, GE or iLight "type" LED replacement tubingvfor neon?

Also - appeared to be a growing section of Chinese vendors at LightFair in Las Vegas this past week - but not a lot of traffic at the show.

[YYZ]

Did you see any of the signs in Shanghai China moving to the Sloan, GE or iLight "type" LED replacement tubingvfor neon?

Some, but smaller installs like outlining an entrance, etc... The bigger animated stuff was all glass. The LED stuff was primarily tube type fixtures (like CK's Accent) that allowed for color change or animation. The stripes on that curved hotel building were 1' addressable RGB fixtures, and the lights outlining the skyscraper are addressable White tubes that have chase scenes up all 80 stories. Also, the shot where the Blue light was washing back on the building was also LED.

Also - appeared to be a growing section of Chinese vendors at LightFair in Las Vegas this past week - but not a lot of traffic at the show.

I don't think there was more than other recent Lightfair shows. Last year in New York there may have been more. I had a couple of people in there to talk to, but when they separate them into a "China Pavilion" it allows many people to simply avoid them if they want to use top tier products only.

[manuellynch]

Some, but smaller installs like outlining an entrance, etc... The bigger animated stuff was all glass. The LED stuff was primarily tube type fixtures (like CK's Accent) that allowed for color change or animation. The stripes on that curved hotel building were 1' addressable RGB fixtures, and the lights outlining the skyscraper are addressable White tubes that have chase scenes up all 80 stories. Also, the shot where the Blue light was washing back on the building was also LED.

I don't think there was more than other recent Lightfair shows. Last year in New York there may have been more. I had a couple of people in there to talk to, but when they separate them into a "China Pavilion" it allows many people to simply avoid them if they want to use top tier products only.

Almost amusing to walk a show in China and see a section for USA COMPANIES...so people can avoid them if they only want to use bottom tier products...hahaha