Month: February 2010

Is Manufacturing in China really that much cheaper?

Picture 4I’m always so perplexed to see how much stuff is made in China and I don’t really get it. Shouldn’t we be interested in creating as many jobs here rather than shipping them offshore?

It’s a tough question, but hear me out, I’ll show you a fancy video at the end.

Lets for instance look at a Billy bookcase from Ikea. Do you really think that there is a lot of labor involved in making one of those? If everything is completely automated in the manufacturing of the bookcase, the only thing that would be more expensive is setting up the factory and maintaining the machinery, but should that cost (even with much higher labor cost) be so small compared (almost neglectable) to the amount of product that is made?

Here is a video of a machine that drills the holes into a shelf, not fully automated, but this is just a demonstration as to the type of machinery used in making a book case. There are machines out there, that just have to be loaded with wood and other materials and that just spit out bookcases every few minutes. Think about it.

So after seeing this, does it really matter if this machine sits in the USA, Canada or in China?