Advice for CEOs

One objective of middle market companies that never changes is to constantly reduce their costs and thereby improve their bottom line and cash retention. Manufacturing companies need to take a different approach to service provider costs. Here’s how.

The partners of the Newport Board Group have found that emerging growth companies who are deciding whether or not to outsource manufacturing operations to China, have many pros and cons to weigh. As expert business advisors, Newport Board Group offers companies important information to consider before making the final decision.

Few subjects are as important - or as controversial - as whether there is a return to the U.S. of manufacturing jobs from China and other offshore markets (and that jobs are staying here in the first place). It’s a controversial subject that, for one thing, politicians like to talk about and take credit for. CEO Tim Cook was in the gallery of the Congress for the State of the Union address last January, when President Obama hailed Apple’s then-recent decision to situate (at least a little more of) of its manufacturing/assembly in the U.S.

In the first part of this article I discussed several principles of doing business in China: working through cultural differences and getting all your key people involved. I would like to mention several other lessons I have learned over years of doing international business in China.

My 15 years of hands-on experience sourcing products from China - including home furnishings, giftware toys and sporting goods - have taught me some lessons about how to operate in this unique market. The most important lesson: there is no shortcut to success in working with Chinese business partners. China is a country where anything is possible - but nothing is easy. Understanding the business culture; getting all your business disciplines intimately involved in your manufacturing operations there and mastering the details are the prongs of a winning approach.