China’s real cost advantage


It’s easy to cut costs in a manufacturing facility. Skip on safety, lower your standards, and you’ll be on your way to a low-cost facility. According to a recent study, these and other missteps have too often been part of Western manufacturers' moves into China.

The study, conducted by Independent Project Analysis Inc. (IPA; Ashburn, VA), found that many manufacturing projects started by Western firms in China are not delivering the savings expected, primarily, concludes IPA, because the companies involved do not have a full understanding of the practices necessary to deliver projects in China. IPA is a consultancy in project evaluation and in project system benchmarking, specializing in quantitative analysis of project management systems; the study was not a China-bashing exercise but an attempt to help Western companies do a better job with their investments.
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