Journal Entry Week 4 Essay Example | Topics and Well Written Essays - 500 words

Journal Entry Week 4 - Essay Example Due to these challenges, shifting their manufacturing base back to the North America seems better option. The most obvious gains would be in the form of savings in labor costs compared to present Chinese trend; savings in transportation, duties, supply chain risks, industrial real estate and other such costs. Automation and other such measures to reduce costs will further depreciate Chinese labor economy. Rising demand markets in the Asian and Chinese regions can be advantageous to the North American manufacturers. Considering the challenges posed by the Chinese labor market, shifting outsourcing base to other developing countries would be beneficial, but these countries lack required resources, skill, capacity, infrastructure, security, government support etc. The US adopted outsourcing culture many decades ago, which caused serious challenges for its citizens; yet, they emerged from these challenges only to be better innovators and, thus, rule the world. During last decade, China dominated the world nations in exports and manufacturing industry owing to its low labor cost and availability of high-end technology. However, the author argues that manufacturing potential in the US still remains higher than visible and its flexibility adds greater potential to its future. Analysts suggest that the cost of production in the US is likely to be same as that in China, or slightly higher. In order to meet profitability from their production industry, China may shift some work to its interior cities that offer lower labor costs; however, differential skill set will be scarce. Many evidences exist to believe about shift of production base from China and other countries back to America; however, large scale production still continues to be undertaken in China. Production competitors to China include other low-cost labor countries: Thailand, Vietnam, and Cambodia. Researchers