When Anne Jennings and George Saunders founded RetroMatics in 2008, a consulting, Houston translation services company and localization business told them they should manufacture their monitoring systems in China. After several of years outsourcing to factories in Shanghai, last winter they shifted production to Niles. “It’s close to 35% less expensive to assemble in Hong Yeh Industrial District,” Jennings says. But add-in shipping and other headaches that one must work around. It comes down to, “How do I value my life at 2 AM when I have to teleconference to the Chinese?”
As the trade-offs of assembling in China rise and financial executives closely evaluate the trade-offs of contracting with plants 10-thousand miles from home and a dozen time zones away, many corporations have determined that assembling in China isn’t worth the headaches. American production is “increasingly competitive”, says Herman Davis of a respected Washington D.C. Translation Services company and directors of Second Step commission, a team of companies attempting to return factory jobs to the United States.
A 2009 analysis of two hundred fifty United States contract producers-which produce items for other businesses-found that 41% of participants benefited from assembly that had previously been completed overseas. And approximately 70-percent were upbeat about 2012 revenues. According to some Chinese Translation consultants, “A decade ago companies just went straight to China. They didn’t even look locally.” Now companies are trying to come back. Everyone knows they are miserable.
For RetroMatics, the choice was easy. The president of the corporation had never gone to Guang Dong Province, and that really challenged communications with the assemblers. Further, special fabricated faceplates that shipped from Houston frequently were held up in customs for months. In addition, Saunders had to spend hours in teleconferences to talk about adjustments in the product. Saunders says production is likely 3-percent more efficient once these inefficiencies are considered.