China Product Manufacturing, Supply Chain and 2022 Outlook
China Product Manufacturing, Supply Chain and 2022 Outlook
It's been insane! For China manufacturing and those who use China manufacturers, 2022 could be the worst year in recent memory. Material and electronic chip shortages, five-fold increases in shipping costs, labor shortages and cost increases, and a supply chain that is extremely slow and delayed.
Q: What should I do?
A: Think about all of your options, but for the most part, Stay the Course.
This opinion isn't our opinion; it's what's going on in the market. Large and small businesses in the United States continue to place consistent orders with Chinese manufacturers.
Why:
China's problems affect the rest of the world and its citizens. When China sneezes, the rest of the world catches a cold, but this isn't entirely true. What happened was that the world was sneezing (COVID), and the global economy suffered as a result. As a result, everyone is dealing with the same issues everywhere.
Alternatives to Chinese product manufacturing are slowly emerging, so we recommend that you carefully consider your options. These options, however, are still in the minority and will take months or years to grow and become more viable. To get the best product manufacturing & engineering firm, we need to check a few more options to be sure.
The best deal is still to be had in China for product manufacturing. Southeast Asia, like India, is becoming a stronger competitor, but only in specific products or markets. Although pricing is important, you should prioritize quality. Taiwan is also a viable option. Mexico and Latin America can also be possible options, but only for specific products and markets. China's manufacturing industry has a wide range of products and options. As they have been for the past 40 years, they are set up and ready to produce. Compared to the United States, China manufacturing still offers 60 % to 120 % lower costs, depending on the industry. When will the manufacturing market go back to normal?
Almost certainly never. Sure, the supply chain will re-establish a better flow, and shipping costs will decline. However, the cost of doing business has risen in all areas, including materials and labor everywhere.
Higher manufacturing costs, shipping costs, and retail and commercial pricing are all part of the "new normal."
We can only hope that these increases in costs and pricing are digestible and do not lead to a more significant economic slowdown. So far, that seems to be playing out OK, and the outlook for 2022 is also solidly, just OK.
We can only hope that these cost and pricing increases are manageable and not result in a more significant economic slowdown. So far, things appear to be going well, and the outlook for 2022 is also looking good.
About the author:
Innovative Design Products (IDP) is a product design and development company located in Irvine, CA. We have been in the product development and manufacturing liaison business for over 30 years and have an A+ BBB rating.