For Made in China, the mass production is our advantage until now in the processing industry, but it is to be replaced by small quantities. Into 2010, the Chinese labor costs rising at double digit rates in recent years, we have a competitive advantage in the cost is getting smaller and smaller. Mass production industry shift from “Four Asian Tigers” to the Chinese coast, and from the coast to mainland, and the future of into the lower-cost inland from China mainland, it is the environment and the trend. As individuals, whether business or personal, you cannot reverse the trend, as the rainy season is over in the Sahara, the oasis gradually wither, herbivores migrate to other places to live, as strong as a lion who had to follow.
So, I think to give up mass production of low value-added, high value-added small quantities into the industry, which is the road traveled for European companies, but also for us will go.
Relatively large quantities of full competition in the industry is relatively large quantities of high-impact industry by labor costs, we will continue to shift to lower-cost regions. The trade of small quantities of it, due to the relatively higher technological content, product design and manufacturing process is relatively complex, often harder into the low-cost areas. In Germany and Japan, for example, it has been a manufacturing country, is supporting the industry has been relying on small quantities.
In addition, I also believe that persist in small processing has the following advantages:
First, the competition of small quantities of relatively small in industry.
Small quantity of high-tech industry in general, on the key components, suppliers often not fully competitive market, because usually only a few suppliers to do certain parts. In addition to technical factors, but also small quantities prevents of more competitors enter.
Second, the relationship with customers will be a long-term partnership.
In mass produce industry, product life cycle is short, such as mobile phones from the market to the next frame substantially only 18 months, the average consumer is about to change once every two mobile phones. For producers, after the product is sold, the life cycle of service rarely, it is short-term relationship between manufacturers and suppliers. However, small produce of the industry is not. Such as the airplane, machine abound age two or three decades. Another example of semiconductor manufacturing equipment, a few million dollars. Like large power plants, power plants, manufacturing facilities, it is several decades, centuries or even longer design life. This means that it have to exist for a long supply chain, such as maintenance services, key spare parts and many times trade relationship. This is also doomed relationship between supply chain partners is the long-term.
Third, guide to transition from extensive management to exquisite management.
Mass production customers hope that the suppliers better and better, as long as import more suppliers, through competition among them can manage costs. But to do so in small production, are very high-risk for customers, small production of the industry is the need for more sophisticated management.
Small production industry is too miscellaneous and too scattered, too much change, too difficult to design systems and processes to address these exhaustive. This was the quality of the staff up to make up, and that is to hire and train first-class staff, under the basic systems and processes to full play to their initiative. No highly qualified staff, no good systems and processes, there is no way to survive in small production industry.
Just like in animal, “mass production” just like frog can produce dozens or even a thousand spawn, but it don’t care spawn after the birth, and finally can become tadpoles grow into frogs very little; “small production” just like Lions generally have only a 2-4 little lions, after giving birth to intensive care, the survival rate is high and more. “Mass production” of frog mainly by nature (“Market”), “small production” Lions are mainly relying on its own management. You’ll know why lion higher than the frog. From amphibians to mammals is a great leap, also like the mass production industry transition to small production industry.