Manufacturing Abroad: Factors & Considerations in China
August 16, 2011 | 4:40 am UTC
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I have been fortunate in my career to have had the opportunity to view firsthand the manufacturing methods used by wood products companies in countries outside of North America, including: Belgium, Germany, Italy and now China. I have been able to observe their similarities to North American high-production woodworking operations in terms of the usage and level of technology, as well as note a general consensus on the need for lean manufacturing in the production process.

That these streamlined and high-tech processes are needed is especially true in the United States. These days, practically every high-production plant, as well as many mid-size and small manufacturers, have had to incorporate some level of lean into their corporate culture, or risk facing extinction. Driving this has been a variety of issues, including increased speed to market, material costs, government regulations and an overall lack of skilled labor.

Considering the population of China, it is perhaps surprising to note that the woodworking industry there also is experiencing a lack of available and/or skilled labor, which, combined with rising wage rates, is driving the use of technology and lean manufacturing. On a recent Tour of Technology to China, I, along with a contingent of American woodworking market leaders, had the opportunity to visit seven of the major players in China’s furniture manufacturing industry. The technology tour was sponsored by Stiles Machinery in conjunction with Homag China Golden Field Ltd. (See story page 28.)

The tour was an eye-opening experience to say the least. With technology needed in Chinese factories to offset the drawbacks of the labor situation, owners must often make a 36- to 42-month strategic plan for investments. During our interviews, a number of Chinese factory owners also revealed they had an ROI of up to five years on new equipment, compared to a stressful, sometimes one-year payback period some attendees reported they must face with their capital investment strategy.

However, what was surprising was that in some plants, despite the level of technology in place, a number of tech tour participants noted there was still a lot of work-in-process inventory for what was being produced and hand work — including laminating — being done where automation could be better utilized to streamline and reduce waste from the operation. As one put it, overall, they did not appear to be as “far along on the lean journey.” Another commented, “The equipment is modern, but overall it could be run to get a better quality out of the machines.” Whether this is a temporary transition or permanent situation is unclear.

Also noted by some tech tour participants, and just as surprising, was the lack of obvious quality control measures in place at many of the Chinese factories. One participant said, “Some facilities had what appeared to be little management direction on the floor,” adding that at one particular plant, the product “quality was deemed to be ‘good enough,’” for the Chinese domestic market.

Overall, though, the North American participants came away from the experience with a better understanding of the business and technology driving Chinese wood products manufacturing, helping them to keep pace in the worldwide economy. I know I did.

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