My Parts are Made in the World

As a child, I heard Japan was bad for selling good products to us at low prices. I was confused then and still am confused now that we blame China for doing the same terrible thing.

The puzzle is further muddied by global production of goods.  Reuters has an article up on how the trade balance is not what you think it is. See it here.   iPhones are made in China, but most of the value is from other countries due to the components inside the iPhone.  So the Made in China mark on the iPhone is meaningless. So why do we track it? “Made in” is a measure of where things get final assembly. Final assembly is low value add, so the “Made in” signs have become meaningless in a Global world.  China is just one part and usually doing the low value things like final assembly.

Jonathan Webb at Procurement Leaders posted about this issue last week that you can find here.  To any international procurement guy, the “Made in” thing is just a game. To sell, to the US Army, you often have to be “Made in the US”.  So people make things all over the world and then do enough final assembly in the States to say it is “Made in America”. It is meaningless and inefficient, but governments do this.  They do this because voters vote these issues. It should stop. Trade is not us versus them and tracking final assembly is even more ludicrous.

Let’s push to put “Made in the World” on our parts – or perhaps stop listing “Made in” at all. The meaning has been completely drained out of it.

Thoughts?

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Posted in: China, Decision Making, Government Issues

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