OEM Manufacturing Solutions Outside of China – The Time Is Now
The US-China trade war, ongoing unrest and issues in Hong Kong, general mistrust of China, and attempts at decoupling are topics that grab headlines daily. And they are rightfully a cause of concern for manufacturers with Chinese suppliers.
As these issues continue to develop, more and more manufacturers are choosing to move their OEM manufacturing solutions outside of China.
Production Pauses Due to Electricity Rationing
In addition to the concerns listed above, yet another constraint to the supply chain is upon us this week as manufacturers warned that industrial production could grind to a halt as several Chinese provinces have imposed electricity rationing.
The latest crisis is due to efforts to conserve fuel stocks ahead of the critical winter heating season, high coal and gas prices limiting generation capacity, and tighter energy consumption targets toward the end of the year.
Pandemic-Related Disruptions Continue To Affect the Supply Chain
Chinese companies also continue to struggle with the ongoing effects of COVID-19. Despite the lack of transparency by the Chinese government, questions surround the efficacy of the Chinese-made vaccine and increases in cases are undoubtedly impacting labor, logistics, and downstream supply.
This lack of transparency also extends to economic uncertainty with the global markets.
The Exit From China Has Been Ongoing
The shift from manufacturing in China is not new: we have been trending net production out of mainland China since 2015. Before COVID it was tariffs that sparked the need for a move; before tariffs, it was rising labor costs.
For years, many companies have chosen to take a “wait and see” approach to the struggles, hoping for a return to the good old days of manufacturing in China. But now most of our customers see that they can’t afford to wait any longer and are seeking alternatives.
Finding OEM Manufacturing Solutions Outside of China
While moving a complex supply chain is a challenge, it’s much easier with the right partner.
We’ve been here before. Major electronics manufacturers made the shift from Taiwan to China in the early 90’s, and Macrotech Marketing Associates was part of that move. For the better part of the last decade, we’ve been trending toward Taiwan again, in addition to Indonesia, India, Malaysia, Thailand, and Vietnam.
MMA has long had a presence in Taiwan, with an office in Taipei. Even when manufacturing made the move to China in the ‘90s, we never abandoned our Taiwan supply chain roots.
We have always had an extended supply chain outside of mainland China. Since the mid-2010s we’ve relied on those suppliers heavily to make the move out of China for customers who wanted to reduce labor costs, avoid tariffs, and now, mitigate the uncertainty born of the pandemic.
If you are looking for OEM manufacturing solutions outside of China, MMA can help you make the move. Schedule a call with us to learn more about how we can help.
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