When it comes to sourcing high precision mechanical parts from China, you may have been doing business with a scale-factory for many years with satisfaction, however recently you find your CNC precision manufacturer start making different excuses to delay your delivery. Or you are just starting to look for someone because you find more and more of your competitors already did so. The problem is there are thousands of machining manufacturer here in Dongguan, which is a hub city of industry cluster for precision machinery in China. Among all those thousands of manufacturer in Dongguan, less than 1% are large-scaled manufacturers, 5% are medium-sized, other 95% are individual work shop, so is medium sized manufacturer a reliable option?
Generally speaking, large-scaled machining manufacturer will be the first choice of supplier which makes your decision simple. But is it really the case in precision machining industry? This post is going to share with you that because a dramatic demographic change leads to greatly increased labor cost, manufacturing sector in China has also evolved to a new era of miniaturization. The once big machining manufacturer is no longer scale economy, while medium and small sized manufacturer is playing a more and more important role in manufacturing sector.
Particularly there are two significant demographic changes have taken place in China during the past 10 years as below.
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Generally Chinese population is getting aged rapidly.
In 5th March 2019, When China Premier Li Keqiang delivered the annual government work report at the Second Session of the 13th National People’s Congress of the People’s Republic of China, he pointed out that the population size for age group of 60+ years has reached 250 million in 2018, up 19% of the total population.
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China is facing a severe shortage of highly-skilled technical worker
The problem of skilled work personnel was also addressed by Premier Li with his above-mentioned report. On demographic structure wise, the country is facing severe shortage of highly-skilled technical worker, which is estimated to be 10 million in 2018. Due to the improper policy of education in the past decades in the country, education in China is outputting too much university graduate with potential for office work while too small graduate of technical education with technical work skills. The proportion of skilled technical worker is around 5% of its overall work force in China, in contrast, 40% in Japan, and 50% in German.
So what does all this mean for a decision maker of machinery parts sourcing from a developed country company who wants to do business with China? In short, today you need to seriously think about medium-sized machining manufacturer instead of sticking to big factory as you did 10 years ago. Here is the reason why.
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You are going to get the same level quality as big factory for most of your order parts.
If it is not a part require high precision, big factory and medium sized factory use the same machine to produce the drawing parts. Besides, even though you place your order with big factory, but nowadays the reality is big factories used to outsource more than 60% of its common precision parts from small-sized workshops. This is the reason why if you will find more than 1,000 of small workshops around some 2-3 big factories in wanjiang district Dongguan City, a southern city of China, also one of the biggest gathering place of industry cluster of precision machining parts. All the small workshops rely on big factory to get second hand order for processing.
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You are more likely to get faster delivery with medium sized manufacturer.
Average delivery time for the industry is 2-4 weeks, but very often you will find you are informed by your supplier of big factory 4-8 weeks delivery time. The reason is big factories find more and more difficult to recruit highly-skilled machinist which force big factories to shrink its production capacity. It is reckoned that the rate of operation in scale manufacturer in Dongguan is less than 70% till the end of February after the Chinese new year holiday. Besides, big factories also face the problem of over-ordered so they have to make queue and grade clients’orders before processing for delivery.
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Lastly, you can save money to work with medium-sized manufacturer, probably 30% above.
Usually the owner of medium-sized manufacturer has 10+ years of experiences in big factories and started own business with only manufacturing know-how, the only reason they can survive competition is because they are cheaper and faster with the same level quality. To getting their cutting edge with cost competitive, they minimize every unnecessary personnel, usually one person to do two or three person work, they cut all surplus procedures of wasting time and money, all that savings will in the end benefit your purchasing price.
Of course minus also goes together with plus, just like there are always pitfalls below flowers in face. So as a conclusion, let’s put in a fair way like this, consider working with medium-sized manufacturer as your supplier, but don’t forget to test them from trial small order till they are testified.
Maybe there are still have some other reasons out there, what do you think? Please leave your comments below!
About IBEE:
A medium-sized manufacturer of precision mechanical parts with 15 years experiences, providing professional custom machining service by CNC milling, CNC turning.
Contact us today to talk more about precision machining in China.
Web: www.ibeepm.com
E-mail: Kevin@ibeepm.com
