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Saturday, July 4, 2009

China Myths & Stereotypes in Manufacturing

Bulb Maker TCP to Produce Its Own-Brand Lights - Wall Street Journal is an interesting article for some of the truths and stereotypes that are dispelled in the article.

One stereotype is China is successful just because it uses cheap labor. If this was true, countries with lower cost labor than China would be very successful. The article mentions the work force was cut from 15,000 to 8,000 in the last 3 years. 3 years ago 100% of bulbs were made by hand, now 60% are made with automation. This is showing how China also uses automation to increase their efficiency.

The manufacturer believes they can sell their bulbs direct and it won't endanger their relations with customers who they produce for. This is a common belief and with most of the Chinese companies I have dealt with they don't understand the channel conflict issue. IE they sell to distributors, and they also sell direct. And many US distributors do not like also competing with the manufacturer - since how can you on price?

The article also mentions the company is looking to set up a factory in the US. This is a big change from the usual way Chinese companies do business. I hope they are successful.

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