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Home > News > How optimistic are Chinese factory managers about the future of their business?

How optimistic are Chinese factory managers about the future of their business?

Posted 10 September 2020

Click here to read this article in Chinese

Factory worker in China
Image credit: https://www.archyde.com/

At Impactt, we believe that managing global supply chains begins with understanding the perspectives of the people who work in them. First and foremost, we place worker perspectives at the core of our work, believing that workers themselves are the best monitors of their working conditions. When looking to improve working conditions we also seek to understand the challenges and perspectives of other actors along the value chain. Be it HR teams, sustainability managers, to commercial teams, and chief executives – they all form an important piece of the stakeholder pie.

Impactt China have spent the past few months interviewing Chinese factory management teams in the electronics, printing and packaging, auto equipment and garment sectors to ask them a very simple question: how optimistic are you about the future of your business? What we heard were perspectives that point to both the economic uncertainties following months of factory shutdowns, and a shift in attitudes towards the future as China transitions out of COVID. Our conversations highlight two common themes that, through our work in China and supply chains globally, we see as having the biggest current impact on the workforce and China labour trends.

Orders: A Mixed Picture

Without the ability to forecast orders, HR managers at the factory level are unable to make informed decisions when it comes to recruitment practices. The ripple effect of this is a smaller workforce with longer, unpredictable hours and low levels of job security.

“Orders continue to fall from Europe and America and our factory is getting less busy. This has frozen our hiring and makes it difficult to predict future orders. All this means our expectations for regular operations are low.”

– Purchasing Manager, Electronics factory

One factory manager told us that since re-opening in April, orders have continued to increase, with expectations that an increase of 10% will be maintained between August and December this year. Others told us the overall business this year will be about 5% higher than last year, with some factory managers commenting that their business has good development prospects for the future and is currently growing.

How do you feel about future business prospects?

chart created with amCharts | amCharts

What does this mean for workers? For us, it points to the nuanced and tailored approach needed to navigate working conditions in your supply chain, even within the same sector and region, to truly understand the impact of COVID-19 on orders and planning processes effect the workforce. For workers, this can lead to job insecurity, unpredictable working hours, changing migration patterns and negative effects on health and wellbeing. Impacts are being felt differently, and factory management teams that had stronger HR processes and communication channels with workers going into the pandemic have been better equipped to adapt and demonstrate resilience.

Switching production

Among the garment factory teams we spoke to, production lines had been switched temporarily to face mask production, adapting to the soaring demand for masks globally. In response to the pandemic, some factories switched not only the type of production, but also from foreign to domestic driven orders. As one HR manager explained:

“The factory has shifted some of its orders to domestic production, due to uncertainty about the epidemic in the US which previously accounted for a large proportion of orders. But the factory is optimistic about the situation at the end of the year, the factory believes the epidemic situation and orders will improve.“

Masks are considered simple products that can be manufactured by existing production lines without much retrofitting. But re-skilling your workforce to produce a completely different product requires news ways of integrating materials and manpower within a very tight schedule. Some factories made the change within just 3 days putting enormous pressure on workers to produce a new product at speed that meets mask quality standards.

What does this mean for business?

Man looking at shipping containers
Image credit: Unsplash.com

As the picture in China continues to unfold, one thing is clear. In a time when ongoing COVID-19 restrictions is leading to cancelled or postponed due diligence efforts from international companies, many labour related issues are being left undetected and unaddressed. Furthermore, the nature of labour issues has become more subtle and complex. Conducting assessments in factories requires, now more than ever, an eyes wide open approach.

Our interviews with factory managers highlight the need for a case by case approach to labour issues rather than relying on blanket trends, particularly in a market as large and regionally diverse as China. Never has it been so important to understand the challenges and mindsets of all actors in the value chain as a means of managing risk and prioritizing remedy and prevention efforts for those who need them the most.

For more information on Impactt China’s work, contact us below:

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COVID-19疫情下:中国工厂管理层对他们的未来业务有多乐观?

照片来源: https://www.archyde.com/

在Impactt,我们认为,管理全球供应链始于理解在里边工作的员工的观点。首先而且最重要的是,我们把工人的看法放在核心位置,因为我们相信工人是他们工作环境的最佳监督员。 在寻求改善工作环境的同时,我们也致力于理解价值链上其他相关方的挑战与看法:人力资源团队、可持续发展经理、商业团队、首席执行官,他们都是利益相关方的重要构成部分。

过去几个月,Impactt 中国采访了电子、印刷和包装、汽车设备和服装行业的中国工厂管理团队,问了他们一个非常简单的问题:您对自己企业的未来有多乐观? 我们所听到的观点既有因工厂停工数月而对经济发展持不确定性,也有因这个国家正在摆脱困境,订单数量出现上升而看好未来发展的。根据我们在中国及全球供应链的工作,两个常见主题贯穿在我们的谈话中,我们认为这对劳动力和中国劳工趋势有着最大的影响。

订单情况:喜忧参半

工人们自己对国际订单减少的不确定性感受最为强烈。无法预测订单,工厂人力资源经理在招聘时就无法做出准确的决定。由此产生的连锁反应是:劳动力人数减少,更长及不定的工作时间,工作保障水平较低。

“ 来自欧洲和美国的订单继续减少,我们的工厂不那么忙了。这冻结了我们的招聘活动,而且未来如何很难预测。所有这些都意味着我们的希望渺茫。”

– 电子厂采购经理

一位工厂经理告诉我们,自4月份重新开业以来,订单持续增长,预计2020年8月至12月,订单将保持去年同期10%的增长。还有受访者告诉我们,今年整体业务将比去年增长5%左右,还有人说他们的业务未来发展前景很好,目前正在增长。

你对未来业务前景的看法

这对工人意味着什么? 我们认为这意味着在您的供应链需要细致入微、量身定制的方法来巡视工作环境,即使是在同一行业和地区,也要真正理解在新冠状病毒疫情下,订单与计划流程是如何影响到员工的。对工人来说,这会导致不稳定的工作、不可预测的工作时间、迁移目的地的变动及对健康与幸福的负面影响。 人们对其影响的感受有所不同,那些人力资源流程更强,在疫情中与工人沟通渠道更畅通的工厂能够更好地适应困难并恢复常态。

生产转移

在我们采访的服装工厂中,为适应全球对口罩需求井喷,一些工厂的生产线由服装改为生产口罩。一位人力资源经理解释道:还有一些工厂不仅改变产品类型,也把之前国际订单的生产转向国内订单需求,以应对疫情。

” 由于对美国疫情的不确定性,该工厂已将部分订单转移到国内生产,而此前美国订单占很大比例。但工厂对年底形势持乐观态度,工厂认为疫情形势和订单会有所改善。”

– 服装厂人事经理

口罩生产简单,目前的生产线转产并不需要做大的改动。但升级员工技能从而生产完全不同的产品,就需要在有限的日程内整合原材料与人力。有些工厂仅用3天内完成了变动,为快速生产出符合口罩质量标准的产品,工人承受着巨大的压力。

这对企业意味着什么?

照片来源: Unsplash.com

随着中国形势的继续发展,有一件事是很明显的:当前因COVID-19的限制,许多尽职调查被取消或推迟,与劳工有关的问题没有机会被及时发现和解决。此外,劳工问题的性质也变的更加微妙与复杂。在目前形势下,评估工厂不能再是曾经的那一个视角,而需要更加开放与视野广阔的方式方法。

我们采访的工厂经理强调,劳工问题需要具体问题具体分析,而不只依赖于总体趋势,尤其是在中国这样大的市场,有着多样化的地区特征。理解价值链中所有参与者的挑战和心态变得尤为重要,例如许多相关方都急需了解新形势下:管理风险、优先补救和预防风险的方式方法

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