Low-cost labor is driving the stampede of manufacturers to China, but they must also consider the logistics implications of a longer supply chain and under-developed local infrastructure.
Companies manufacturing in China must choose whether to ship through Hong Kong or the mainland. Business and government leaders in Hong Kong are promoting the territory as the better choice in supply-chain management.
When Bama Companies, a Tulsa, Okla.-based pie maker, found it too costly to continue exporting to China to supply McDonald's, its biggest customer, Bama officials decided to set up operations there. Implementing that decision involved numerous challenges.