Yesterday at work I met an interesting business man. His name was Phil and he sold industrial kitchen equipment in and around the world. Believe it or not, there is great deal of money to be made in that particular niche…but I digress. While talking about his work, the topic of out-sourcing came up. He told me that the Chinese are starting to build grills that are identical to those made in the
United States by American Air. We all know that companies transfer their manufacturing needs to foreign countries because it is cheaper to produce them there than in the
U.S. This may be true, but what are you giving up in terms of quality? How much better or worse are the products coming out of these counties?
Phil told me that one particular industrial dishwasher he markets costs around one million dollars. The machine has thousands of moving parts, and requires a high level of ingenuity to both design and create. This is where the conversation got interesting. He informed that while the washer was made in the
US. If the same washer was made in China it would cost 3/5 of
US production cost. It may seem sensible to make them there, but on the average (according to Phil) kitchen equipment made in
China has no where near the same quality as its American counterparts. He mentioned how their machines are often cheaply made and constantly plagued with problems. While a person may pay 40% less for a Chinese made dishwasher, how much time, effort, and money do you have to invest in fixing a faulty product? In business, time is money, and if you equipment is not working right, than money is just going down the drain. I personally would not want to have to repair something (due to poor quality) that I just paid 600,000 dollars for. After Phil left, it got me thinking about other things. What kind of products are still made in the
US (or in developed countries) and Why?
Agricultural products (tractors), heavy machinery (bulldozers), and software, are among the items still made in the US, Canada, Japan, Australia, and in
Western Europe. But why? These items require a great amount of technology and work to create. Furthermore, the tiniest design flaw can cause huge expenses or costly damage. I’m not saying that the Chinese can not produce a good tractor, but there is a reason why Massey tractors are build in Canada, John Deer in Iowa, and Caterpillar in
France. They make a superior product, people recognize that, and choose to buy their products over other products build in developing countries. Even Honda and Toyota, Japanese companies, have factories throughout the Midwest and
Southern United States.
So, in conclusion, buy Chinese cell phones, underwear, and toys…they work just the same as their American counterparts. However if you don’t mind spending extra money for a high-end, quality product (such as cars, and combines, and tractors), then buy American, Japanese, Canadian, European, or Australian products.
