how to compete?

I recently was shopping around to have a product of mine manufactured.
Reality check:
To have it made in China with semi-skilled labor was $1.60 per hour.
The exact same job here was $21.00 per hour. You do the 2nd grade math...
The point was made to me if I like being able to afford the things I own
then they have to be made elsewhere. Period. No US manufacturer can touch
that. Most everything you own was made this way. Tough luck if it's
substandard.
Reply to
ben carter
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Just as water will naturally find its own level, so do economics. Imagine that we , in America ( small volume) are fortunate to live at a very high economic level while most of the rest of the world ( large volume) live at a low level held down by pressure. ( represented by totalitarian regimes, primitive living conditions, religious practices etc.) If you open a hole between them, the large volume will begin to flow up rapidly while the small volume will drop slowly until they equalize. The real question is a moral one- do we have some divine right to stay at the top and keep the rest of the world on the bottom. Of course some will jump in and say we are on top because we practice capitalism. However if you subscribe to this, then you cannot fault someone else for practicing it better than we.
Reply to
EdFielder
what's the per unit cost? [as mentioned above] even more relevant, what is the effect on your profit margin? If you buy at $1.00 and sell at $30, it is only your personal greed that drives you to go offshore. If it is a commodity item, and you are selling at 1.80, then it is necessity that drives you offshore.
What about lead time shipping cost and quality? Have you investigated many US manufacturers or just ones you know?
Reply to
yourname
Did you figure in shipping your product from China to the US? Unless you are talking ship-bound container service or an extremely expensive part, it's a huge part of the cost to consider.
...If someone finds a cheap shipping method for 200# boxes or crates from China, Tiawan, Vietnam, etc. that gets here in 2 weeks time or less, I'd like to know about it. My unit's internal components could also be made there but the overall cost is much higher!
I'll stick to US made products until the cost savings would simply mean bad stewardship of my resources... And then I'd only consider something from overseas if I thought I could somehow benefit the US by offering a good product for significantly less so that those who get worse jobs here would live better because of a cheaper product. ...Not likely, but always keep an open mind, right?
Reply to
Joe AutoDrill
One caveat - get the Chinese producer to make a prototype run and see if they can hold to specs. Company I'm with recently got a bunch of small parts made in India and they came covered with burrs and with slightly undersized holes (don't know how they did that, it's a standard metric size). The rework has long since eaten up the initial price differential.
Mac
Reply to
Jim McGill
First of all, I suspect this is a troll. *Everyone* knows that virtually all of our small consumer goods have been made in 3rd world countries for at least the last 20 years. Now most of the large durable goods and a fair amount of the parts that go into our cars are being made there. It's a done deal and there is no use whining about it.
Try building a VCR for $50. Try building a VCR for $1000. The only company in the US that even tried was Cartravision, but that's another story.
So there should be no surprise that your part would cost 1/10 to make in China. What you left out is that if you make it in China, you'll have a ton of issues to deal with such as tooling, quality, shipping, customs documents, design theft, minmum quantities, letters of credit, etc, etc. So if you're doing 100 pieces, that $21.00/hr starts to look pretty cheap. And if you're doing 100k pieces, you wouldn't be posting on this newsgroup.
If you're going to build something to sell, don't waste your time on a mass market. It's not worth it. Build something that will save a few people time and money. Or build something so well that people will happily pay a premium for it.
There's still plenty of opportunity for manufacturing things in the US. But it's all in specialty work, not commodity.
Reply to
Jim Stewart
$1.60? You are talking shop rate, right? Most labor in China make much less than that per hour.
Ayup, though to be fair..the Chinese are producing less and less substandard work.
Gunner
"At the core of liberalism is the spoiled child - miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosphy of sniveling brats." -- P.J. O'Rourke
Reply to
Gunner
This is patently untrue.
Economics has been a complicated subject for many many years.
I'm sure that the roman economics textbooks were just as thick and dense as our modern ones. :^)
Jim
Reply to
jim rozen
Another "fact" that most people don't [want to] recognize.
Through a combination of luck and very hard work for a long period of time by a large number of people, the United States is blessed with an extremely high, although falling, standard of living.
Water can be made to run up hill and a much higher standard of living than the majority/average can be maintained, but only if energy, time and money are continually pumped into the system.
There are have always been and always be no-loads in every system/culture [I am not talking about the famous welfare mom driving the Cadillac, who is simply responding to a system she didn't create and doesn't like, rather the corporations and organizations that take far more out of the system than they create as a mater of policy and planning].
The problem is this has become the norm. Given this is the case, the only rational course of action is to try to get yours while there is still something to get.
GmcD =====================================
Reply to
F. George McDuffee
Leftism was well represented by the totalitarian regimes portion of the post.
Have you no shame?
Gunner
"At the core of liberalism is the spoiled child - miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosphy of sniveling brats." -- P.J. O'Rourke
Reply to
Gunner
Exactly. This is an excellent argument against using American semi-skilled labor, but that doesn't necessarily translate into not making it in the United States.
There's more to successful manufacturing than sending a prototype around to a lot of job shops and getting bids.
--RC
"Sometimes history doesn't repeat itself. It just yells 'can't you remember anything I've told you?' and lets fly with a club. -- John W. Cambell Jr.
Reply to
rcook5
Obviously not. We've got to earn our value. But there are ways of doing that -- at least in most cases. We just have to be smart enough, quick enough and flexible enough to find them.
This applies to individuals as well as economies.
--RC
"Sometimes history doesn't repeat itself. It just yells 'can't you remember anything I've told you?' and lets fly with a club. -- John W. Cambell Jr.
Reply to
rcook5
He's talking about the economy, not economics. And our economy has become baroque, arcane and complex.
(To carry your distinction back to the Roman Empire -- you'd lose. Roman economics texts simply didn't exist because there was virtually no formalized body of knowledge at the time.
Now if you want to compare a book about how to run a business in the Roman Empire with a similarly complete text for our own time -- you'd still lose. The Roman book would have been many times as thick as ours, in part because their system was even more baroque, arcane and complex than ours.)
--RC
"Sometimes history doesn't repeat itself. It just yells 'can't you remember anything I've told you?' and lets fly with a club. -- John W. Cambell Jr.
Reply to
rcook5
It sounds to me like an inventor trying to bring a new product to market. Unsophisticated, yes, but legitimate nonetheless.
--RC
"Sometimes history doesn't repeat itself. It just yells 'can't you remember anything I've told you?' and lets fly with a club. -- John W. Cambell Jr.
Reply to
rcook5
I don't see why the Chinese can't also replace the US engineers and middle management and save even more money.
Reply to
Dave
Damn straight.
My first boss told me "Anybody can build one item in his garage. The trick is to build a 1000 with $5/hr labor. And get them all to work"
(Adjust for 1980 dollars)
Reply to
Jim Stewart
What Jim says is right on the money. Labor costs are so cheap in other parts of the world that large production runs made in the USA are rare. As to precision, these people in third world countries are just as talented and smart as anyone in the USA. If they are making cruddy parts most the time it's because that's what was ordered. Hard drives and microchips (for example) are produced in China and these items are very precise and require all sorts of precision in the process. My shop does small runs of stuff that can't be made cheap enough and fast enough if not produced locally. I also make scuba stuff that is non-life supporting that sells all over the USA and Canada. But the quantities are too small and the quality too high for someone to copy and sell. So far. I will keep trying to come up with more products to sell to niche markets that are too small for foriegn competition. My biggest worry about industries moving away from the USA is military. Too much of our military is supplied by single source overseas companies. This puts us at risk if these companies are prevented, or decide, to stop supplying us. A case in point: I just bought a used USA Army surplus backpack. It is known as an "Alice" pack. It has definitely seen plenty of use. But it's well made and still in pretty good condition. And some of the parts have tags with the part number and "MADE IN INDIA" printed on them. I think this is a bad idea. What else do we have made in countries that may decide to be hostile to us? China supplies lots of computers to the USA. Do any of these wind up at your local Army base? ERS
Reply to
Eric R Snow

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