Chinese footwear manufacturers are no longer low-cost? – CRI-1001 Tester manufacturer

Dongguan is a manufacturing city in southern China, in the local footwear industry, the average monthly wage of 960 yuan. As one of Nike's largest contract factories, Yue Yuen Industrial is given is 1472 yuan monthly salary.
    In a lot of companies are the problem of rising costs of headaches for the industry, this gap would have been trouble. But Yue Yuen Industrial is booming, a fact that may be outside of the Pearl River Delta, Dongguan as well as a reference for manufacturers.
    The past 5 years, China's export prices have been rising. UBS economist Jonathan – Anderson (JonathanAnderson) in a recent research report said: "(China trade) partner country data show that in U.S. dollar terms, by 2003, imports of footwear from China , toys, furniture and textile prices fell about 3% per year, but after 2003, the annual increase to 3-4%. "
    Taking into account the cost of labor is one of the problems, and Yue Yuen Industrial and other enterprises face increasingly higher costs of many, so the price increases in recent years can be described as very mild. As Taiwan's Pou Chen Group, a subsidiary listed in Hong Kong, Yue Yuen has been able to absorb cost rises, which for people to understand why China's export growth has provided some clues.
    The Chinese government last week's trade and inflation data showed that Chinese exporters is how difficult the operating environment. 11, the Chinese government announced in February of this year's consumer price index rose 8.7% from a year earlier, a 12-year high – severe snowstorms in January of this year due to commodity shortages exacerbated by inflation. That exporters make matters worse, since the mid-2005, the RMB exchange rate against the U.S. dollar has risen 15%, now about to break through 7 to 1 mark.
    Inflationary pressures in the basic stake in China, because inflation is likely to make exporters more difficult to absorb the impact of domestic cost pressures. Although this year's harsh winter weather, such as seasonal factors such as a serious distortion of trade data, China in January to February's trade surplus fell 29% from a year earlier to 28 billion U.S. dollars, suggesting a possible future situation.
    Chairman of China equities at JP Morgan in a research report, Jing said: "We expect (China) in March export figures to rebound, but we still expect this year's export growth will appear more moderate slowdown … … slowdown in China's export industry is facing economic growth is one important risk. "She referred to the reduced demand for OECD economies. On the OECD's exports account for two thirds of China's total exports.
    However, the Yue Yuen factory in Dongguan, China's export industry for the flexibility to provide a sufficient evidence. Last year, Guangdong footwear exports increased 14.6% to 9.6 billion U.S. dollars, textile exports rose 18.4%, to 420 billion.
    Yue Yuen Industrial, and other large exporters to benefit from its first large scale of operations. For instance, Yue Yuen Industrial is located in Dongguan, Nike foundry business has 27,000 employees, annual production 14 million pairs of shoes – and this is only a total number of employees up to 10 million, larger manufacturing group a small part of total output.
    Yue Yuen Industrial average wage higher than the industry more than 50%, but it is relatively expensive labor costs also cover the productivity incentive measures. Most shoe companies in Dongguan, the average monthly wage is basically working hours and overtime decisions, and their overtime hours often exceed the legal limit. However, Yue Yuen Industrial, the average wage is only about two-thirds of hourly wages. Nike's vice president for corporate responsibility Hannah – Jones (HannahJones) said: "If you have extra questions, you will have the quality and delivery problems."
    Yue Yuen Industrial Average pay the remaining one third, as a group from the production line to achieve the productivity and quality goals.
  These lines are modeled on the Toyota pioneered the "lean" manufacturing principles. Nike North Asia regional director of compliance services Sonya – Decken – Jones (SonyaDurkin-Jones) said: "(employees) can not be a bad part walk away (to another team member) and then say goodbye to it . "Nike lean on each production line are labeled" NOS "name, this is the first letter of the Latin novusordoseclorum short, meaning" Jesus Christ the new order. " This phrase also appears in U.S. dollars on the back, may explain how it is rooted in the Nike system memory.
    Earlier this month, Nike executives spend 3 days with reporters visited the Yue Yuen factory in Dongguan, saying the plant is an example of hope Nike's entire supply chain in China has reached such a level. Nike's supply chain, including about 180 Chinese factories, a total of 210,000 employees. One-third of all Nike shoes made in China.
    Yue Yuen Industrial high wages the company to productivity and quality was rewarded; Another advantage is that the labor market supply and demand in the most recent in a favorable environment for staff, the company's recruitment problems than those with lower wages competitors. "We have been subject to environmental challenges the industry – to provide overtime pay some of our competitors," Pou Chen Group, a manager JohnsonTong said, "but the staff hopes to make money, not the (increase) in working hours."
    "In this environment, you want to reduce the staff turnover rate," Jones added. "Time to market not only is our driving force. If you jump from one factory to another factory, how do you achieve this? This is not the pursuit of labor cost, but rather stability and innovation."
    The other side of the Pearl River Delta, the private ownership of the Hong Kong shirt maker Esquel Group takes a similar attitude. The company's factory in Foshan employment with 26,000 employees, the company founder's daughter, Chairman Marjorie Yang, whose clients include Gap, JCPenney and Nike. Last year, the company produced 6,500 shirts.
    And Yue Yuen Industrial, like Esquel Group must respond to a series of rising costs. The company also intends to increase the cost of investment 50 million U.S. dollars to build a clean manufacturing facilities, including its own power plants and water treatment plants. It's water treatment plant for sewage treatment from all the links to the dyeing industry.
    These investments make Esquel Group is more solid foundation in the Pearl River Delta, where there is a wealth of textile workers in the labor available to the companies. "You have to pay for staff labor and wisdom," Marjorie Yang employees at the time said about her. "For us, stability is most important, so we can use our management skills to deal with external problems."

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