It’s very easy to think that all US made goods are of better quality than globally produced items made in countries like China. Well, keep in mind that given our global supply chain, things aren’t really what they seem.
When you look at the label of any kind of product, it’s easy to conclude that if something says “Made in USA,” that all items involved in the production, design and distribution of that product took place in the United States. This is not necessarily true. In fact, it’s very common for products sold in the US to be designed in the US and everything else takes place all over the world.
That’s right. Pretty much the only US DNA that makes it to the product that you’re enjoying is the fact that somehow, some way, somebody in the company behind that product thought of the product. That’s it. That’s all they did. They designed it and outsourced everything else.
Maybe the materials came from Canada and South America. Maybe the factory where all the parts got put together was in China. Maybe the packaging was from Japan. Whatever the case may be, this is the global reality of mass manufacturing.
If you think about it, this makes all the sense in the world because by stretching your global supply chain to all four corners of the globe, your manufacturers are able to tap into the competitive advantages of these local players. For example, if plastic is very cheap to produce in China than elsewhere, then it’s a good idea to get high quality yet cheap plastic made in China.
Similarly, if it makes a lot of sense to get stuff designed in Israel because of the quality of the final product, then it makes sense to source designs from that part of the world. Do you see how this logic works? You have to understand the reasoning behind this strategy.
One key component of the reasoning behind global supply chains boils down to local expertise and comparative value. One of the most common misconceptions about global economics is that it is most ‘efficient’ to buy stuff from the ‘best’ source. For example, if you’re serious for getting the highest quality stuff, just buy from the country with the best reputation for such quality. The problem with this thinking is that it would make for more expensive products since ‘the best sources’ would get a lot of bidders and their output becomes more expensive than they need to be. Moreover, this ignores the fact that buyers are willing to forgo some quality in exchange for lower costs.
For the longest time, consumers all over the world were left to resign themselves to the idea that you are really only able to choose among two factors when it comes to product quality. According to this old idea, products can be made cheap, can be made quickly, and can be made well. With that said, consumers have to resign themselves to the fact that they can only take two. In other words, if you want a cheap item that is produced quickly, then you have to resign yourself with the fact that it might not be all that good. Similarly, if you want a top notch, high quality item that is produced quickly, you might have to pay extra for it.
For the longest time, consumers all over the world were convinced that this is the way to go. That there is really no other option. You can only take two factors out of the three. Well, with global supply chains, it is now possible to buy very cheap items with high levels of quality.
So don’t get thrown off track when you see a label behind your best model steam engine kits that says “Made in China.” The design might be from the United States. The fabrication process might come from England. The machines that made your model steam engines‘ parts might as well have come from Switzerland. Do you see how this works?
So don’t get thrown off by the ultimate assembler or assembly line. Focus instead of the global DNA as far as design, research, manufacturing, packaging, assembly and fabrication that went into a particular product.
Simply focusing on the origin label is not going to do you much good. In fact, it might give you all sorts of misconceptions regarding the overall quality of the product that you are considering. You might just end up not buying a product because of these misconceptions and you end up losing out.