16th June 2010
SATRA CEO, Austin Simmons, recently met with manufacturers in China, where he is Chairman of the SATRA China Advisory Board. His comments on the changing face of manufacturing competition in South East Asia will form the basis of future industry workshops and articles, part of which is below.
"Business confidence is increasing and we appear to be coming out of the recession, albeit slowly in some sectors," said Mr Simmons. "Although the situation remains fragile for some, many factories are busy producing footwear again for Western markets. However, all of them report stiff competition, rising costs and thin profit margins.
"China remains the most dominant footwear exporter by far, but the business environment has changed - other Asian economies are becoming more competitive. Before the recession it was significantly easier to run a successful business, however, the rapid growth rates driven by Western companies’ sourcing strategies experienced in the early part of the 21st century are no longer sustainable. As a result, Chinese companies will increasingly find themselves under pressure from competitors. If they are to counter the new business environment of higher labour and material costs, skilled labour shortages, increased legislation and significantly increased competition, they need to look at efficiency improvements.
"Many companies are looking at lean manufacturing initiatives and improving productivity. As part of this they might also be working towards reducing materials waste and energy consumption. As well as making good commercial sense, such reduction sends out a positive message that the products produced have less impact on the environment."
The environmental issue, including climate change, is a growing debate among political leaders, media and general public the world over. Companies that prove they are producing what may become known as ‘sustainable products’ will inevitably prosper by way of mutually beneficial local and international partnership, supply chain respect, retail demand and consumer loyalty.
For a manufacturer to make convincing claims for the products brought to market they need to be credible, based on sound principles and verifiable. To meet this need, SATRA has developed the basis of a Sustainable Product/Production scheme which outlines environmental impact through energy and material usage, presence of chemicals, emissions during manufacture and end-of-life disposal. Discussions to form an industry working group began on 16th June at SATRA’s Technology Centre in the UK. Topics included carbon footprint of shoes, waste, emissions and exposure to chemicals. The next generation of production efficiency systems for product manufacture was also outlined.
SATRA is also inviting any company in the product supply chain that has an interest in achieving sustainability, and all consumers who would like to express their thoughts about the environmental impact of the products they buy, to participate in SATRA’s People Products Planet initiative at www.peopleproductsplanet.com
The by-product in the quest for better performance, safety, quality and efficiency is the technology born of the innovation that drives future trade. Such technology can be harnessed and reused again and again to help improve the lives of people throughout the world now and for future generations. It is a philosophy that SATRA’s research team has held for over ninety years and the reason why, on our ninetieth anniversary, we said we are ‘still shaping the future’.
"It is always difficult to predict the future," continued Mr Simmons, "but we can be sure that, as we enter the post recession era, life will be increasingly tough for manufacturers and businesses will need to adapt and change. Greater efficiency will be fundamental to success – commercially and in preserving our natural resources."
[Picture shows Eric Zheng (left) of Kangnai Group being formally presented with a certificate of SATRA China Advisory Board membership by Austin Simmons]
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