Last April, CNNMoney ran an article featuring the growing rise of China’s economy and how its conglomerates are seeking to offshore their production to the United States. Citing Thilo Hanemann, a research director at Rhodium Group, a New York-based economic advisory group, the article states that “More Chinese manufacturers have been launching their own U.S. facilities in the last five years.”
In response, several States in the U.S. have instantly risen up to accommodate these foreign investors as taxes and the state of the economy continue to drive a desperate need for revenue and jobs. On the side of the Chinese investors, establishing facilities in America allows them to shrug off the weight of anti-dumping tariffs imposed by the federal government against imported products.
“When the U.S. imposed those fines in 2010, 95% of exports from China of aluminum extrusion products stopped,” said Lijut Du, president of Nanshan America which is a subsidiary of China’s Nanshan group that manufactures aluminum components (just one kind of product subject to anti-dumping fines).
This could lead to many implications for the SCM scene as previously, American companies have popularly been regarded as the ones doing the offshoring to countries like China, particularly for processes like manufacturing. No doubt that the issue of offshore outsourcing has already sparked a great deal of controversy regarding labor laws in not just China but also in other parts of the world. This turnaround could also have implications on those subjects as well. For more than a decade, countries like the United States have been deemed as the source of those who are outsourcing to offshore companies in the hopes that differences in currency would help alleviate costs as well improve the state of developing nations. As a result however, many Americans are complaining that outsourcing could be a potential source of job-stealing.
Back on the subject of SCM however, this in turn could mean good news for companies supplying manufacturing and supply chain management software. This goes for both software companies offering their services in the cloud and for those still sticking to traditional, on-premise systems.
With the trend of ERP systems starting to favor cloud computing, those who are offering SCM as SaaS now have a wider and more global range of potential candidates for software sales leads. On the other hand, those who still manufacture on-premise systems can also benefit as these new facilities would require applications to manage.
Simply put, since Chinese companies are seeking to move their manufacturing to the US, American SCM system suppliers can now join in on the trend with the arrival foreign investors adding themselves to the list of prospects. This should be good reason for the suppliers to put more effort into their marketing and lead generation campaigns.
It doesn’t really matter what method you use, whether you target them with email or give them a phone call. Unless cost is involved, there may not be much of a difference either if you’re hiring freelance online marketers or already using outsourced telemarketing. China’s growth is definitely spelling out potential growth for not just those seeking to use these new foreign investments for jobs but also to include these investors into your list of possible business clients.