WHY CUSTOMERS OUTSOURCE
TO CHINA?
By Jim Stavis

This is a question many companies have grappled with over the past few years. As more of their competitors have moved offshore, it is only a matter of time before a company must explore their options just to remain competitive. As a steel supplier to U.S.-based manufacturers, we see this movement as a genuine threat to the supply chain of raw materials in virtually every manufacturing sector. And as industry after industry has moved away, it is only a matter of time before the U.S. manufacturing sector ceases to exist and that will be quite sad for America. Last month, we had one of our long-standing accounts inform us that they would be buying their steel products from China, or at least trying to anyway. We could hardly blame them for trying because the cost incentive was so great. Similarly, much of the steel we sell comes from all over the world. If we were to only carry American-made steel, we also could not be competitive.

So why then do so many companies have horror stories in doing business with China? I think one big reason is there are 1.3 billion people in China with an increasing manufacturing base of companies. Some of those companies are honest and reputable while others are not—just as there are many companies in the states that are reputable, while others are not. Some care more about service and quality while others do not. The problem is many companies in China advertise via their websites, which may or may not be legitimate. There really is no way to know who you are dealing with other than to actually go to China and see the facilities and meet the people before conducting business.

The second problem that warrants caution is price. The Chinese pricing model is typically lower than what we can offer here, but it does not factor in transportation, scrap and the cost to manage quality. Invariably, the quality must be managed in China as well as once it lands here in America. You cannot assume that the samples will be the same quality as what is shipped here in production. A common complaint I hear is that the Chinese substitute materials in production not understanding that the substitution affects the quality of the product. Since a production run can take quite awhile to occur, the company may run out of options and be forced to use the substandard materials.

Finally, we have the communication problem with China, with language, culture and time. Obviously, the language is very different, but so too is the culture. What is acceptable in China may not be acceptable here in America. Then, of course, there is the time difference. When it is day here, it is night in China. This makes it more difficult to have discussions about logistics, orders, etc. These challenges are not impossible to overcome, but are real issues in doing business with China. We have sayings in America, such as "You get what you pay for" or "Penny wise and pound foolish" to reinforce the idea that price isn’t the only factor to consider. Whether or not it is better to do business in the U.S. or China, only you can be the judge. But I think it is safe to say, the world is changing and all of those changes are not in the best interest of the ol’ Red, White and Blue. At risk is our country’s workforce and the very economy that creates the need for these products in the first place that are now made in China.

NUTRITION IN THE WORKPLACE

Recently, my daughter became a licensed, registered dietitian. Most of her studies have focused on dietary and nutrition requirements of the human body, the study of food science and nutrient metabolism. She became interested in nutrition as a result of being the daughter of a diabetic who developed renal and heart disease. Her passion is to help people improve their nutrition to achieve optimal health and ultimately prolong life. So my daughter has spent some time at Paragon Steel and recently began counseling some of our employees on their (un)healthy lifestyles. She is advising them on their diets, how to change their eating habits to lose weight and exercise. So far, the results have been impressive. My daughter asked me if I knew other companies that might be interested in using her consulting service with their employees. After all, healthy employees are happy employees and nutrition in the workplace benefits the organization as well.

If you have an interest, my daughter Jessica can be reached at Jessica.Food4Thought@gmail.com.