A few weeks ago, I discussed garment and shoe production in Asia with an executive who has great experience in the footwear and garment industries. They shared some insights about different Asian and African countries, as far as production capabilities go.
Here are my notes in a list per country:
- Right now it is not a major manufacturing center, but it should gain momentum in a few years.
- 80% of the population works on farms. Don’t expect a very fast migration to cities.
- Large potential workforce (the second most populated African country).
- Workers there expect to learn new skills. They don’t just come for a job. It is possible to set up a very good factory there.
- Culturally it can be considered a Latin-American country.
- Non-monetary rewards go a long way to motivating the workforce. It is closer to Mexico than it is to China in that regard.
- Very poor government — it was Asia’s second richest country after Japan after World War II, and they used to have Chinese as maids — now the opposite is true.
- Factories there can’t seem to ship anything on time, whether it’s garments, furniture, or apparel. That’s the major problem.
- In the North (and in neighbouring Pakistan), factories employ men (more than 90% of the workforce).
- In the South, factory workers in apparel are mostly women.
- It is possible to find some good factories (from a quality and efficiency standpoint) with a good workforce.
- Those good factories are more likely to be close to Chittagong (local village employees).
- Labor productivity is still very low. In the shoe industry, for example, the average is 0.5 pair per labor hour, compared with more than 2 pairs in North America. This difference is NOT primarily due to automation, but to smart industrial engineering.
- Very hard to engage in deep training with migrant workers who are planning to return in their home town in a couple of years. Changing the mindset is difficult.
- Migrant workers are very focused on short term monetary gains.
- Because of rising costs, China will keep losing garment and shoe business in the coming years.
- Many Chinese and Taiwanese manufacturers are still chasing cheap labor instead of focusing on increasing labor productivity. They are relocating or setting up new factories mainly in Indochina (Vietnam, Cambodia, and Myanmar mainly) and in Indonesia.
- In those countries, they can hire, and communicate with, a few local managers.
- Chinese manufacturers generally don’t relocate their facilities to South Asia (India, Bangladesh, Pakistan). Similarly, African countries will probably not be a good option for them.
What are your thoughts on these manufacturing locations?
This free eBook shows importers who are new to outsourcing production to China or Vietnam the five key foundations of a proven Quality Assurance strategy, and also shows you some common traps that importers fall into and how to avoid or overcome them in order to get the best possible production results.
Ready to get your copy? Hit the button below: