Wednesday, May 31, 2017

Manufacturing trends: automation and ethics - Ben Cavender

Ben Cavender
Manufacturing is changing fast in China, says business analyst Ben Cavender to the Fast Company. Factories phase out labor for automation, and stick to more ethical standards. Although some of the less ethical producers move to countries outside China.

The Fast Company:
According to Benjamin Cavender, a principal at the China Market Research Group, which advises brands doing business in China, factories are also increasingly automating their production lines, which means fewer labor-intensive tasks for workers. “The market was fairly low-tech, run by small operators,” he explains. “There’s been a hell of a lot of consolidation over the last couple of years. Since most of the smaller factories did not have the margins or the cash to be able to update their operations, they’ve closed down.”
Big international brands are also increasingly applying pressure to factories they partner with to make their buildings more environmentally sound and to ensure workers are treated fairly. “There’s been a push by a lot of the international brands to force the Chinese [manufacturing] companies to clean up their act,” Cavender says. “If you’re Nike, for example, you don’t want to get attacked in the U.S. because consumers are unhappy that you’re being unethical about how you source product.”... 
Unfortunately, the movement toward more ethical factories in China does not signal a global trend. Increasingly, Chinese companies are themselves seeking out cheap labor in other parts of Asia and the rest of the world, perpetuating the standards that once ruled in Shenzhen. The collapse of the Rana factory in Bangladesh in 2013, which killed 1,129 people, was a brutal reminder of how low those standards can be. 
“The major factory owners in China that have scale–the big guns–have moved all the low-value manufacturing offshore,” Cavender says. “They’ve started buying factories in Vietnam, India, Malaysia, or Sri Lanka. They’re having the cheaper production done there, then reimporting the product back to China to do the high-tech finishing.”
More in the Fast Company.

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