Wednesday, July 15, 2009

Is the "Cheap China Price" Gone?

According to Businessweek, after "the added challenges of quality, logistics, and engineering changes", Mexico's apparently cheaper. While I'd agree up to a point - those who initially seek to outsource usually ignore the risks - I've got a boatload of horror stories clients have told me.

Frankly I like hearing that clients have been burned before we work with them because it means they recognize the value we provide after we do deliver. For us, we're not the cheapest price but we're not the most expensive either. On the other hand, in my experience, many of these risks carry over to both the US and Mexico. The proximity/clustering of some services makes the production of more complex parts often less expensive than Mexico - so long as quality can be managed.

That said, I wonder how one can make such a broad assessment of a swath of manufacturing services based on one indicative part alone that BusinessWeek cites. Here comes my cheap shot - maybe that's why Businessweek may only fetch $1 (FT). More seriously, I think these things have to be evaluated on a case by case basis with even service providers resulting in massive range of variance in both quality and price - especially over here in China.

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