Agenda n n n n Why Manufacture in China Types of Manufacturers Finding a Manufacturer What to Expect Prepare for the Unexpected Risks & Rewards Experiences
Larry Butz 25 years with Trane specializing in – Product Development – Technology & Product Globalization – Technology Transfer & Factory Start-up – Environmental Sciences Headed Intl Service Division Five Years as Engineering Manager for Trane Europe/Middle East (France) Technology Director for Trane Intl Environmental & Technology Spokesman
China 1982 -84 Two Shanghai Factories – – – – Customized Products Equipment Selection Process Optimization Quality Standards Training Supplier Qualification Factory Layout Product Testing Capabilities
China 1995 - 96 Large Chiller JV Ligang, China – – – Customization Technology Transfer Training Lean/Simple Processes Supplier Development
China & Asia 1997 - 2002 Technology Globalization & Environmental Spokesman
Why Manufacture in China? n n Lower Cost Product Access to China Market
What to Expect n n n Lower labor costs Lower raw material prices Lower component/subassemblies costs Range of quality levels available Fewer constraints (regulations) on factories
Types of Manufacturers n n n State Companies Wholly Owned Locally Joint Ventures Wholly owned Foreign Your Own – Build or Buy
Where to Find Heavy Industries Light Industries
How to Find n n n Government Agencies Industry Directories Web Bidding Networking Shows & Exhibitions
Be Prepared for Change n n Longer Pipeline Reduced Flexibility Change Control Cultural Differences n n Societal Value Systems Business Customs National Laws
Be Prepared For Change n More Administrative Personnel n n Logistics-Import/Export Banking/LC/Currency International Law Communication n n Time Difference Language
Insight & Advice The relative cost of equipment vs. labor is significantly different in China. Expensive labor saving equipment used in the US will not be the best choice in China. Be prepared to make minor changes in your design specifications to obtain best results.
Risks n n n Currency Variations Proprietary Design Info Political
Environmental Considerations n n n Fewer Regulations Reduced Use of Coal Clean Air & Clean Water Shortage Green Beijing Olympics Environmental Costing
Thank You for Your Time Larry Butz GEA Consulting, Inc 2420 N. Pine Creek Rd. La. Crescent, MN 55947 Tel: 1 -507 -895 -6826 Fax: 1 -507 -895 -4001 Email: LButz@gea-consulting. com www. gea-consulting. com