Instead of looking at it on a product-by-product basis, however, outsourcing has become a strategic position that companies are taking for all aspects of business. From marketing work to virtual teams and everything in-between, China has become a go-to solution for many industries to improve their bottom line. The pros and cons of outsourcing to China must be carefully evaluated before a final decision is made. Here are some of the key points that should be considered.
Not only is treating others right an ethical imperative, but from a pragmatic public relations view, bad treatment of workers leads to terrible press. In recent years, Apple has also felt the sting. Notice the other concerns a company must also have.
Environmental impact is a concern that has spread around the world. Last year, Chinese environmental groups criticized Apple for being unresponsive and uncommunicative regarding questions about pollution and occupational health hazards.
Other companies, such as HP and Samsung, received praise from the groups for their cooperation. The story wound up in the Financial Times. Talk about high-profile bad press. Some of the other topics are not just the subject of political correctness; they provide evidence that a company has the operational wherewithal to deliver what it promises.
Ethics are a concern because they are keys to good business partnerships. For example, Apple's auditors found some companies falsified records.
If they do that regarding worker salaries or environmental practices, can you trust that they would do otherwise on product quality, specifications, or ship dates?
Similarly, management systems that are developed enough to ensure compliance are also more likely to deliver the results that a western partner might need. Apple's experiences and actions also show that outsourcing is a more complicated and potentially expensive issue than many companies think.
Seemingly low prices on goods are fine, but if you haven't calculated the costs of ensuring that you get what you need from partners, you haven't seen the true cost of getting the bargain.
Jan 19, More from Inc.Outsourcing to China Pros and Cons China is a developing nation and is experiencing a lot of growth. It has huge manpower available and is emerging as one of the leading choices in the field of computer hardware.
The made-in-China model, on the other hand, has carried no such social benefits, either in Apple's home country or in the People's Republic. Last year, Apple built up cash reserves of $bn. While outsourcing is an attractive proposition, companies using outsourcing services should be aware of the pros and cons.
THE PROS OF MANUFACTURING IN CHINA. Putting your manufacturing unit in China can be advantageous in many ways.
To maintain international competitiveness, be strategic.
Apple’s China outsourcing reduces production time from 9 months to 15 days. Mr. Hillsberg, courtesy of an info-graphic shows that the time it takes to hire 8, engineers to oversee , factory workers.
In China, this process takes 15 days, in the United States this same hiring process would take nine months. Using a mix of Apple's own filings and industry data, the academics broke down the cost of making one product in particular: the wildly popular 4G iPhone.
Assembled in China, the total cost of. Apple, for instance, relies on hundreds of thousands of Chinese workers to build its products. Competitive demands and the pinpoint timing of major product launches mean that Apple wants those workers, or the companies employing them, to be able to ramp up at warp speed and turn on a dime.