Here are some interesting or useful articles that I found recently.
A serious strike in a Taiwanese-owned factory, located in Dongguan city, is disrupting the supply chains of a few sports brands.
This kind of strike was unthinkable 10 years ago, when migrant workers were looking hard for a job. But now they know they can find another employer easily, and they are more aware of their rights.
This facility was probably audited for social compliance tens (hundreds?) of times, but the irregularities the workers are complaining about were not found. I am not surprised. Checking the contracts’ validity and the effective payment of social insurance is not part of conventional social audits. Maybe it should.
Everybody in the Dongguan area has heard of this situation. Expect this type of strike to play out in many more factories in the future…
I particularly enjoyed Alberto Vettoretti’s analysis of the role of management, the workers, and the local government in the above-mentioned case. He describes “a three-way balancing act to keep business in China in the face of rising labor costs, regional competition and a seemingly insatiable demand for more money by its own workers” in depth.
Chinese wages are going up. Most factory owners don’t know how to manage their human resources. So the logical next step, they think, is to automate production.
In this article, Gordon Orr, a director at McKinsey Asia, describes China’s insatiable thirst for industrial robots… As well as Chinese manufacturers’ own growing offer in this category.
Note that this is not an across-the-board trend. Some Toyota factories go in the opposite direction.
Fortunately, a few things are still cheap in China, as Mike bellamy points out. Admin and technical functions tend to commend much lower salaries than in the West. That’s why some sourcing agents are still doing well.
Etienne Charlier points us to the advice of a consultancy (Booz & Co) for companies buying in China. As basic sourcing (“who is the cheapest?”) is less and less of a viable option for importers, they need to learn how to get the most out of their suppliers. By the way, that’s what I call “hands-on sourcing“.
Fredrik Grönkvist reminds us of a few basics about shipping containers, and suggest good ideas for tracking where a container is in real time. I had never thought of doing this.
Dan Harris describes some recurring misconceptions that American lawyers (and, I think, most people in North America and Europe) have about the way business is done in China. It is a good read!