The United States and Europe lost their competitive edge in building high technology, high volume consumer product development decades ago, and never developed the infrastructure needed to compete. The government’s focus and investment were in defense technology while Asian companies and governments invested in consumer technology.
My first trip to Asia occurred more than 30 years ago when I was developing a slide copier at Polaroid called the Polaprinter. It was a product for industry and professionals that produced an instant color print from a 35mm slide. Polaroid, like other large companies at the time, had a serial process requiring the engineering design to be done before the manufacturing engineers would get involved. That meant a long process of design, manufacturing review, and redesign. I thought I’d be able to bring the product to market more quickly by using a small Japanese company, Sunpak, that had design and manufacturing skills for similar products.
Japan pioneered the use of teams with skills in both design and manufacturing. No passing a design back and forth, just one team to get it right the first time. Most Japanese engineers were trained in both design and manufacturing and could fulfill either role. They realized that a good design was one that also could be manufactured efficiently and it made them better at both jobs.
I didn’t go to Japan for lower cost labor but to save money by getting to market more quickly. Many studies have been conducted since and have concluded that more profits come from entering the market sooner, even with the added costs of accelerated development. In the case of the Polaprinter, the bet paid off. We were in production within a year of beginning the design, much faster than most products.
Over the past three decades there’s been a movement of technical proficiency, infrastructure, and manufacturing of consumer technology from Japan southwest to Taiwan, Singapore, Hong Kong, Korea, and China. Japan served as the example from which the other countries learned (see Figure 1.5).
Figure 1.5 Map of Asia
Japan is no longer competitive for manufacturing most consumer products, and many of the once small entrepreneurial companies have grown larger and become more bureaucratic over the years. Hong Kong developed its engineering and manufacturing skills to build technology products, but eventually shifted its priorities to focus on finance as its factories moved to China.
Currently Taiwan and Korea have some of the most technically advanced and highly educated workforces and have become homes to the most advanced notebook computer and mobile phone designers and manufacturers. But as their standard of living has risen to match ours, their labor costs have increased so that now, the manufacturing of many of their products has moved to China.
A majority of consumer technology products are currently being made in Southern China in the province of Guangdong, particularly around its capital city, Shenzhen (see Figure 1.6), near Hong Kong. Many of these factories are owned and run by their Taiwanese, Hong Kong, and other foreign owners. I’ve brought many products to be developed and manufactured to all of these countries over the past two decades but now focus mostly on China and Taiwan.
Figure 1.6 Map of Southern China
While cost was once the main reason, it’s no longer the primary one for our building products in these countries. A bigger reason is to get the product to market more quickly and with fewer hassles than doing it in the United States or in Europe. Even as labor costs rise in China, it remains the best place to go. It’s become almost a requirement to go there if you intend to compete in the consumer world. China has the resources and the infrastructure and is referred to as the manufacturer for the world for high tech consumer products.
But, as you’ll discover in the pages of this book, going to Asia is not so easy and is fraught with risks and challenges. Many companies have only horror stories to report after trying to use China for development or manufacturing.
A number of products that I’ve brought to China have run into problems. Sometimes it seems the longer I work there the less I know. But that’s because the area is expanding so rapidly. This book will take you through some of these experiences. I’ll share with you what I learned, so, perhaps, you can avoid making the same mistakes.