International Law

Whither China Outsourcing?

By Stan

Has the recession changed global manufacturing and trade so much that companies may be rethinking how and where they make products?

This was the focus of a recent WSJ article:

Farouk Shami, a Palestinian-born hairdresser who built a $1 billion manufacturing company around a popular line of hair irons, is moving all of his production of hand-held appliances from China to a sprawling new factory here.

The move flies in the face of conventional wisdom, which says gadgets like this are best made in a low-cost country. But, he says, outsourcing has led to a loss of control over manufacturing and distribution.

“We’ll make more money this way — because we’ll have better quality and a better image,” says the 66-year-old, who says his company, Farouk Systems Inc., spends about $500,000 a month fighting counterfeits, most of which he says originate in China. The company collects the fake products and tracks the source, and then brings action in China to shut down illegal producers.

Mr. Shami figures having production under his nose will help him control quality and inventory, and also fight the fakes, since imported irons will automatically be suspect. He sells in 104 countries, but the U.S. represents over 60% of the company’s sales.

Lots of reasons why a company chooses to manufacture in China, and there are also many reasons why they would decide to go back home (or elsewhere). Here are a few:
(More)

© Stan for China Hearsay, 2009. | Permalink | No comment | Add to del.icio.us
Post tags:

Full post as published by China Hearsay on August 25, 2009 (boomark / email).