Purchasing economics in Korea and Asian supply chain profits

By Dominique Numakura

Japanese manufacturers survived because, in part, they implemented continuous cost reductions thereby helping to increase productivity rates which contributed to maintaining reasonably good margins and profits. Today, Japan still exports a considerable volume of electronic goods and automobiles against some of the highest labor costs in the world.

In comparison, both business style and culture among Korean companies can be viewed as somewhat similar to those in Japanese companies during the 70s and 80s. And, because of this, Korean companies will be able to continue exporting if Korean company management learns from the history of Japan’s manufacturers.

Korean company management must be able to distinguish the differences between the negative and positive aspects of Japan’s manufacturing history (and rise) and understand these differences. If so, Korea, in all likelihood, will probably experience some periodic confusion and lack of measurable forward progress such as a temporary slow down in exports and some bankruptcies in the near-term but, for the most part, most manufacturers in South Korea will survive.

Exporting companies in Thailand, meanwhile, have also been experiencing serious appreciation of their currency recently, the Thai Bhat. Thailand’s manufacturers and export businesses are also seeing financial damage brought on by their country’s currency’s appreciation. Unfortunately, we cannot be as optimistic in the case for Thailand or other countries in the greater Pacific Basin region, including Malaysia, primarily because of a predominantly different business culture when compared to Korea or Japan.

Private message OEM peers. Access all content.

For electronic OEM professionals working in OEM companies. Connect with OEM peers and access exclusive content.

Add your comment


Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

TIP: Anyone can post article comments whether or not you are registered. But, if you register or log in you can attribute your posts to your user profile in GlobalNet Community.

Your email address will not be published. Required fields are marked *



You might also like:

How to Cut Costs 5% to 15% for EMS Manufacturing Services

Provider spotlight

About is the leading online destination helping electronics OEM decision makers make more informed decisions and reduce risk. We offer educational Webinars, thousands of original articles and helpful tools, a community of influencers who understand the challenges facing your company today, and a comprehensive directory of electronics provider services.

Copyright Venture Outsource, LLC. All Rights Reserved
The material on this site is for informational purposes only and is not a substitute for legal, financial or professional advice. Distribution and use of this material are governed by our User Terms Agreement and by copyright law. By using our Website you agree to site Terms and Privacy policies. For questions please contact at 1-888-860-1193 or visit