Jds

[Martin Boekers]

I recieved an email from the Pres. of JDS (as I'm sure many have)

I guess it sort of confirmed what I thought about why they were out of stock on many items. Between the economy and the logistics about buying goods made in China it made it difficult to keep inventory levels where they need to be.

They expressed that they would be back in their high standards in a few months as they are working hard to achieve this. The sooner the better

JDS has always been a great supplier for me and I look forward to them
getting back to their normal level of excellence!

Marty

[Larry Bratton]

Yes, I received and read the same letter. JDS is a great supplier, but it worries me that they and all of us have gotten so reliant on Chinese produced goods to keep our industries going. What happens when they decide they don't want to sell us anymore. I guess that's another discussion.

[Martin Boekers]

I know all to well! I had issues with a marble supplier a few years back it took over six months to get the product I ordered! Not only that when it finally reached the states I was told it was in customs and that took 2 months!

I try to buy as much USA things as I can, but it is difficult in this field.

It still can take a month are two to reach the warehouse after it ships.


Marty

[Tim Bateson]

Yes, I received and read the same letter. JDS is a great supplier, but it worries me that they and all of us have gotten so reliant on Chinese produced goods to keep our industries going. What happens when they decide they don't want to sell us anymore. I guess that's another discussion.

What gives me concern is why is China moving production plants further inland & away from mass transportation/shipping? I have my own political/military theories, but I'm open to any other logical reasons.

[Larry Bratton]

What gives me concern is why is China moving production plants further inland & away from mass transportation/shipping? I have my own political/military theories, but I'm open to any other logical reasons.

Good point Tim, I wondered that too.

[Liesl Dexheimer]

I haven't received the email yet but I'm glad I read this post. I just purchased some things from JDS a few days ago, there were 3 products that I was planning on ordering but couldn't b/c they were out of stock...guess this explains why.

[John Barton]

What gives me concern is why is China moving production plants further inland & away from mass transportation/shipping? I have my own political/military theories, but I'm open to any other logical reasons.

I live here and the reason that factories are moving inland is to cut costs as labor is cheaper inland and more available. Also companies are getting subsidies from cities farther inland who wish to attract investment.

Labor costs on the coastal areas are relatively high and getting higher, labor is in short supply and what is there is fairly transient. It's also harder for companies on the coast to keep their secrets and to not have their key employees leave and start competing firms using stolen IP, contacts and equipment.

The central government is not overtly moving factories inland. Those decisions are made by individual companies based on their own needs.

[Scott Shepherd]

It's also harder for companies on the coast to keep their secrets and to not have their key employees leave and start competing firms using stolen IP, contacts and equipment.

Sorry John, that just struck me as funny. So they stole the IP from some other global source, and now they are worried about someone stealing "their" ideas?

Wow....

[Tim Bateson]

I live here and the reason that factories are moving inland is to cut costs as labor is cheaper inland and more available. Also companies are getting subsidies from cities farther inland who wish to attract investment...

According to the letter from JDS, they are being told by these factories in China that part of the delay in shipping is that there are fewer workers inland.

[John Barton]

According to the letter from JDS, they are being told by these factories in China that part of the delay in shipping is that there are fewer workers inland.

Well I didn't address the sourcing aspect of this thread. The number one rule in China laowei (foreigners) learn is that you absolutely cannot trust anything that a factory says to you. Nothing.

You have to do your homework, visit if you can, check out competitors, get competing quotes using local people if possible, spec out everything to nth degree, source your own materials, and after all that you give them the PO, pay the deposit and PRAY.

The factories and trade agents will do and say everything they can to get your business. Then once they have your order they will give you every excuse you can imagine as to why it's late or wrong or late and wrong.

I came here wide eyed and hopeful - confident that I was going to change them and show them a better way. I have since been humbled mightily. You cannot go up against 5000 years of culture. We like to think that we are clever? The Chinese people have taken cleverness to unimaginable levels.

Oh sure, we Americans are more efficient, we develop great tech and have processes down to a science. But when it comes to really getting the best of it the Chinese factories win easily.

The coastal areas have lost 20 million workers this past year. The figure comes from the amount of workers who went home to their inland towns and never came back and a much lower figure of new workers coming to the coast looking for jobs. Due to the earthquake two years ago and other incentives there is a lot more work in western China now so people don't have to go to the coast.

Of course there will always be pockets where the prevailing trend isn't present. So it's quite possible that the JDS supplier is telling them the truth.

As I said I live here and am responsible for coordinating about a container a month for the company I work for. Sometimes it's like herding cats getting all the suppliers to get the goods done in the time they promised. And when something goes wrong they just shrug and refuse to do it over since the do-over wipes out all the profit. It's frustrating for me and I am here.

[John Barton]

Sorry John, that just struck me as funny. So they stole the IP from some other global source, and now they are worried about someone stealing "their" ideas?

Wow....

Yeah, something like that. :-) It's brutal here in that regard. Actually a lot of Chinese companies do develop their own ideas as well. But still most production is built on IP that's not theirs.

[James Stokes]

My wifes company owns a company in China specifically for their own products. They can not get their product here nor can they get the quality control up to standards. They have owned the Chinese company for 15 years, They are now debating shutting it down due to all of the problems.

[Mike Christen]

I for one say this is all great news, very glad to hear that china is having problems. Maybe, i doubt it, but maybe some companies will stop outsourcing and purchasing products from china and there slave wage labor. They have destroyed many companies and their employees. I hope the companies that outsourced manufacturing to china go down also. This is only my opinion I could be wrong or mis-guided. Sorry for anyone I may have offended.

[John Barton]

My wifes company owns a company in China specifically for their own products. They can not get their product here nor can they get the quality control up to standards. They have owned the Chinese company for 15 years, They are now debating shutting it down due to all of the problems.

I understand completely. When I sit around the bar and swap stories with other expats we all can tell the same stories.

It's not that the Chinese are bad people or stupid people. I have a couple theories though. In general the Chinese are not taught shop classes in school. They don't grow up building things for pleasure and discovery. They work with their hands to provide sustenance and they do just enough to get the job done with whatever quality level that they customer will accept or ignore.

My theory of why this is goes like this: They don't have the same relationship to everyday luxury that we do. The average Chinese factory worker comes from a place which makes trailer parks look like luxury villas. We, westerners and especially Americans, have a much tighter relationship to quality because of the fact that we are surrounded by it. We build our own treehouses, we work on our own cars, we have generally five to twenty brands of anything to choose from, etc....

Really though the culture is SO different that it's hard to pinpoint the problem.

I have heard that a lot of companies are considering the same option as your wife's.

China is modernizing. The workers are getting more experienced (not necessarily more skilled) and able to demand higher pay. Taxes are going up, labor is in short supply and turnover is high. This cycle repeats itself every place that industry goes to produce goods. It happened when America was the "sweatshop to the world" from the 1850s though the 1930s and is happening to China now. Many businesses are taking their production to Vietnam and Africa. Chinese companies are outsourcing to Africa. How's that for irony?

Me personally, I have a great crew of people who try very hard. It's frustrating for me sometimes as I have to educate them on basic shop techniques, teach them basic jig making, harp on quality all the time, but at the end of the day I feel I am doing some good. If I have to be here then I might as well try to make the people around me better people. I can do that in my little shop. In a factory environment forget it. No chance.

Politically I'd much rather have the Chinese making toys than weapons. One way or the other the government has to keep people working and if they aren't working on consumer goods then they would be building up the military. But anyway that's all getting too deep.

[John Barton]

I for one say this is all great news, very glad to hear that china is having problems. Maybe, i doubt it, but maybe some companies will stop outsourcing and purchasing products from china and there slave wage labor. They have destroyed many companies and their employees. I hope the companies that outsourced manufacturing to china go down also. This is only my opinion I could be wrong or mis-guided. Sorry for anyone I may have offended.

Well, comments like "slave wage labor" are mis-guided. That's unfair because the cost of living is so much lower it follows that the wages are lower.

It's the same reason a person doing the same job in New York City earns more than a person in Mobile Alabama.

As far as outsourcing goes. You really can't fault business for trying to increase or maintain their profitability. That's what business is there for.

When a factory comes into your town they are there because it makes financial sense to be there. When the factory is losing money or is barely breaking even then the owners of the factory have to look at what they can do to keep it running or shut it down.

Business doesn't owe anyone a job. From small to large business hires as needed and downsizes as needed. That's just the business cycle. The needs of the owners/shareholders will always be directly opposed to the needs of the employees. I personally feel that the best method to run a business is to make every employee a shareholder. Then the interests are aligned and the employees work very very hard to grow the business they are invested in.

But that's another topic.

Back to outsourcing and China specifically. Every business in the world would like to have it's production be as close to it's consumers as possible. No one likes to outsource and especially not half a world away.

China is getting more sophisticated. They now have a middle class that is larger than the entire American population. By middle class I mean people who own their homes, own cars, can afford to travel, etc....

Factory owners in China are finding that they can sell products to the domestic market for as much or more than the retail price of those same goods in the USA. So they don't have be the bottom of the food chain anymore and take the smallest slice of the pie.

Again this is normal in the cycle. So increasingly foreign companies are having a harder time with their Chinese production, especially small to midsized companies. The big boys in China, the big multi-nationals, have imported their own people to run things and generally they have a great handle on their Chinese operations. (generally, but there are notable exceptions).

So as a result a lot of companies that jumped on the outsourcing train are now looking to get off and explore other options. Communities in the USA are offering subsidies for companies that bring jobs to their towns. Free training, tax breaks, preferred land, free roads, etc... Companies are looking at the lower wages in rural America and other alternatives to see if they can bring production and service closer to the consumers of their products.

The world is changing for sure. I happen to believe that everyone on Earth deserves the opportunity to make the best life they can. To me it's not an us vs. them kind of thing. We want happy secure lives and so do they and it's possible for all of us to have it.