Top Industries That Benefit From Outsource Manufacturing

Despite international political rumblings, outsourcing manufacturing continues to be a preferred strategy for U.S. businesses.

The U.S. is the leading producer of consumer technologies, software, and tech products in the world.

But if these products were manufactured in the US, the cost of production would make them too expensive to be marketed profitably.

There is a lack of skilled and unskilled industrial labor in the US so it is impractical to manufacture most consumer goods within the country.

In addition, the cost of materials is also higher due to the higher cost of labor and resources.

Because of these reasons most of the tech products sold in the Western world are actually manufactured in China and India.

Both large and small businesses are turning to Asia and China to manufacture products in ever-increasing numbers.

There are literally thousands of companies outsourcing manufacturing to China just from the United States, let alone other countries.

If you go to some of the trade shows in China you will see several hundred thousand manufacturing companies vying for your business…and this is just the tip of the iceberg. Behind each booth representing a Chinese manufacturer, there are dozens of cottage industries functioning as small manufacturing companies making parts for the larger manufacturers.

Why Do Companies Outsource Manufacturing?

China is by far the largest destination for outsourcing manufacturing of complete products and parts of products in the world.

But it is important to understand that most countries still have quite a vibrant manufacturing sector within their borders.

The question arises, why do companies prefer to manufacture in China rather than their own country?

Opportunity Costs Of Outsourcing Manufacturing To China

There are certainly many advantages of outsourcing manufacturing to China, but there are also opportunity costs:
a) Difficulties in communication due to language and culture.
b) Logistical challenges due to distance and differences in time zones.
c) Legal challenges caused by local laws vs. laws of another country.

If you have done your due diligence and are confident your business can handle the difficulties of outsourcing there certainly are a lot of benefits of manufacturing in China.

Help is available if you want to outsource to China or Asia.

Why Top Industries Contract Manufacturing In China?

Outsourcing has made it possible for even small, local businesses to create consumer products at a reasonable cost without having to build the manufacturing and distribution infrastructure themselves.

But when deciding whether to outsource your product’s manufacturing, you must consider whether or not you have the internal infrastructure within your company to handle overseas production.

Outsourcing manufacturing to China can provide:

• An economical and efficient way to produce many of the consumer goods that Americans purchase today.
• The lower costs of operation and manufacturing in Asia have especially empowered businesses to create consumer products that are affordable and readily available.

The result is offshore manufacturing remains a top strategy for many industries, especially those that produce sophisticated consumer goods.

The big benefit of outsourcing to China is you don’t have to produce the entire product overseas. Many companies find it easier to outsource key components and do some or all of the assembly in their own country.

Of course, finished goods are the most common scenario, but due to tariffs, treaties, and shipping challenges, many outsourcing companies find it easier and more cost-effective to give the finishing touches in their home country.

China Manufacturing Advantage

If you have a brilliant idea for a product but don’t know where to start, contact an outsourcing specialist like Arcadia Sourcing to help you:

• Reduce Labor Costs
• Expansion Capabilities
• Improve Workplace Focus
• Access To More Talent
• High-Quality Products & Materials For A Good Price

We’ll take the time to understand your unique needs before recommending an overseas manufacturer for your product. We understand your needs are unique so we will be your direct representative in China.

Our team will ensure that your components and parts are delivered on time, as promised.

Our professional team can help you find the best manufacturing facility for any of your processes including:

• Castings and forgings
• Precision machining
• Plastic-injection molding
• And more!

We also offer supply-chain services to help you get your product on the market such as:

• Design
• Prototyping
• Sampling
• Packaging
• Shipping
• Warehousing
• Sourcing parts and materials
• Beginning-to-end logistics

Top Manufacturing Sectors In China For Outsourcing Manufacturing

Most of any business’ operational tasks can be outsourced; however, in some industries, the practice is more commonplace than in others.

Computer Hardware, Software, and Hi-Tech

Apple Inc., Dell, Google, Microsoft, Sony, Cisco, IBM, and HP among many other Fortune 500 companies have a long-standing relationship with contract manufacturers in China.

Hardware and software companies routinely leverage outsourcing to China and Asia. Major players in the American tech industry harness the robust infrastructure.

Access to highly trained specialists at an affordable cost allows for healthy profits in the tech sector.

If the same products were manufactured in the US or Europe just the cost of labor would make the end product too pricey to be competitive in the market.

Manufacturers in China are able to deliver higher quality goods at affordable prices for consumers.

Retail

While retailers benefit from outsource manufacturing just as much as other companies. Retailers like Walmart as well as other much smaller companies with their own brand of consumer goods often outsource manufacturing to create cheaper alternatives to the products they stock.

This is both a cost benefit to consumers and a money-making tool to boost profit margins for the stores.

Walmart, Sam’s Club, and Costco are great examples of outsource manufacturing success for retail. Their brand name products are primarily outsourced to China where they can be made at much lower costs than other brands. These cost savings help the company’s bottom line, and some of the savings are passed onto the consumer who can buy essentials for less.

Thousands of manufacturing plants and contract manufacturers are dedicated to producing products exclusively for retail brands.

Any product that can be formulated in the U.S. can likely be manufactured overseas for a fraction of the cost. Most products found in retail stores are manufactured overseas with cost savings benefits for both producer, retailer, and consumer. Outsource manufacturing can reduce your operating costs, improve your bottom line, and help you bring products to market faster.

Sports Equipment And Apparel

Sportswear giants like Nike as well as many smaller sports equipment manufacturers outsource the production of all their products to various overseas manufacturing plants.

According to a report out of Ohio State University, China does 36% of all Nike’s shoe manufacturing, while Vietnam has another 36%, Indonesia accounts for 22%, and then Thailand comes in at 6%. Their apparel is manufactured in 41 countries including China, Vietnam, Thailand, Indonesia, Sri Lanka, Pakistan, and Malaysia as their top countries.

Industries That Outsource Manufacturing

Manufacturing in China still remains one of the main destinations for companies that outsource.

While in the past low cost of labor was the primary motivator, China has managed to build one of the best manufacturing and logistic ecosystems for electronic manufacturing.

In 2017 China exported 40% of the world’s computers, and as of data from 2017, China makes 80% of the world’s air conditioners

Many industries benefit from outsourcing manufacturing to China but the following industries have deep roots in China’s contract manufacturing sector:

• Aerospace Industry
• Automotive Industry
• Construction Industry
• Electronics Industry
• Food and Beverage Industry
• Marine Industry
• Medical Equipment Industry
• Pharmaceutical Industry
• Heating and Cooling Industry
• Farm Equipment Industry
• Laboratory Applications Industry

Examples Of Commonly Outsourced Items In Top Industries

What types of products are Chinese manufacturing companies especially good at producing?

In reality, China manufacturers are capable of producing high-quality products at low prices in just about anything.

The industrial manufacturing sector spreads far and wide from automobile parts to sporting goods. The fabrication of products intended mostly for industrial use is the most common application of outsourced manufacturing in China.

There are a variety of manufacturing processes that are very efficiently produced through contract manufacturing.

Industrial manufacturing companies that outsource are part of very competitive markets often with already well-established brands, and new ones popping up every year in hopes of getting some of the market share.

By outsourcing some or all of their products, these companies can focus on doing the so-needed research and development activities to come up with new and innovative designs and software ideas that will keep them relevant.

The following are examples of products and services employed by American and other Western countries:

• Castable urethanes, Rubber molding, rubber extrusions, plastic extrusions, and injection molded plastics can be custom engineered to give you the lowest cost and the shortest production times possible. Choose from a wide variety of materials to get exactly what you need.
• Complex assemblies in any industry with full support from engineers, in-house designers, and quality control professionals.
• Electronics, Controls, PCB boards, Sensors – Experienced manufacturing companies can provide through hole, surface mount, and even hand-printed PCB boards.
• Electric, pneumatic and hydraulic actuators for adjustable furniture and other equipment.
• AC And DC Motors with various shafts, lead wires, and connectors that are compatible with metal or plastic gears.
• Metal Fabrication for industries like renewable energy enclosures, data center products, utility and industrial enclosures, telecom broadband cabinets enclosures, self-service kiosks and digital signage, and security enclosures.
• Metal stamping services
• Aluminum extrusions
• Injection molding
• Custom wire, rope, and cable assemblies with custom push and pull controls

How Top Industries Outsource Manufacturing Without All The Problems

If your company has enough resources you might consider employing a team of full-time staff in China.

But in most cases this is unnecessary. Just as China manufacturers can provide high quality at low prices due to their infrastructure, there are also services you can hire to do the work of full or part-time employees you would consider hiring.

Sourcing companies in China can provide all the services you need as if you had hired a dedicated team to manage your project.

In fact, since these companies are located in China and are totally familiar with the language and culture they have connections that you could never have on your own.

The advantage of having an experienced team “from” China can never be replicated by outsiders.

Top industries always employ sourcing agents to look after their interests for many, if not all manufacturing processes from the initial design to shipping and logistics.

How Arcadia Sourcing Makes Things Easy For You

Here’s a simple breakdown of what a sourcing company does, and how it can be helpful for you.

1.  A China sourcing company will source products for you.

This means if you want to sell a product that already exists OR you want to manufacture a new product, a sourcing company will help you qualify, audit, and find the best factory based on your needs at your quality/price range.

This process may seem simple but it takes deep expertise in the industry, well-established networks, and references to ensure you are working with a factory that is reliable and trustworthy.

A sourcing agent can save you huge amounts of time and money.

2.  Order Monitoring

A sourcing company is your project manager on the ground. Arcadia souring agents make sure the manufacturer or supplier meets your product deadline.

If there are any delays, your sourcing company in China quickly and clearly communicates with you. You’re not left in the lurch wondering when or if your product will be delivered.

You will have peace of mind knowing a team of experts is making sure your product is delivered on time.

3.  Quality control

Arcadia Sourcing will make sure you are getting the quality of products you want. We conduct inspections and audits of factories at several points during the manufacturing process. A final quality inspection is done at the factory just before shipping.  You can rest assured your product will have the exact quality you want.

3.  Logistics

A sourcing company will make the flow of the process from start to finish a smooth one. It will make sure

• All products are packed correctly
• Logistics documents will all be in order
• Ensure the shipping happens with the most effective mode of transportation.

You can simply sit back and trust your sourcing company to take care of all the logistics and details from product conception to delivery.

5.  Post-delivery service

After delivery of the product is completed, a sourcing company will always check in with you to ensure complete satisfaction.

A sourcing company is your one-stop solution with eyes and ears on the ground.

Arcadia Sourcing represents you to all the middlemen, contractors, manufacturers, and suppliers as well as the legal matters involved with shipping internationally.

We carry out all on-the-ground investigations and find the best-suited supplier for each task in the process.

Give us a call at 1-888-659-1018 or email rbpande@arcadiasourcing.net if you have any questions or just want to figure out what to do.