I Love China - and cheap Indian buyers

No, really.

For years I have run a small manufacturing business that is reasonably protected from Chinese imports. Competing with us means shipping a lot of air, which can be expensive, and long lead times which are anathema to our Indian customers. Our European customers are wary of Chinese production for various reasons including the fire and forget nature of trade with China (LC's only please).

That has not prevented our wonderful Indian customers from threatening us with the China price.

At first we could not understand how the Chinese did it because we know their plant configurations, labour use etc. In order to be comfortable investing further we (and the rest of the Indian industry) had to beat the price.

We used:

1) More productive machines
2) Better trained workers
3) Large capacity tooling
4) Reduction of processes

At Indian selling prices (40% to 60% of European) we have the same labour to value added ratio as the most efficient European manufacturer.

The China price is no longer threatening. Now if only I could afford the freight to China.