In Industryweek, Josh Green says:
This article will explore one of these manageable aspects -- the increasing cost of manufacturing, particularly in China.
By now, most supply chain managers are quite familiar with the story that ends in higher manufacturing costs. Because everyone decided to manufacture in China, the demand for labor increased, leading to rising wages, which forced factories to raise their prices (i.e., your costs). The good news is that you're not alone in confronting rising costs in China. In fact, the rising cost of doing business in China is the most common complaint I hear from sourcing executives. And, there are actions you can take to keep costs under control. I'll come back to this in a moment, but, first, let me address a very dangerous line of thinking -- that price increases in China are temporary.
A common misconception is that the Chinese authorities will likely take action if the cost of doing business in China continues to rise. Many think (or hope) that the government will work to keep wages and prices under control in an effort to maintain the growth of their existing export industries.
However, evidence suggests the Chinese authorities are tolerating -- and, in some cases, encouraging -- these increases.
To read more:
http://www.industryweek.com/ReadArticle.aspx?ArticleID=17848
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