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Video WHY MALAYSIA: In 2011, we had our first opportunity to visit a factory in Malaysia; we were blown away by what we saw. By 2012 we began manufacturing for one customer and by 2017 ninety percent of our customers had migrated to Malaysia for final goods manufacturing. Companies like Intel, Western Digital and Sony have known for decades that Malaysia is an ideal environment for manufacturing. The key to this success is the people and the relationships we have formed. The suppliers' attention to quality and detail is unmatched. The ease of doing business is outstanding, allowing us and our clients to focus on the product instead of manufacturing issues. In 2012, we set out to analyze manufacturers across Asia (China, Phillippines, Taiwan, Indonesia and Vietnam) to find the manufacturers and region with the best combination of characteristics. Below is a summary of our conclusions, specifically comparing Malaysia to China.

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CategoryMalaysiaScoreChina (including top tier manufacturers)Score
English ProficiencyManagement strong, Operators high9Management weak, Operators low2
Business TransparencyOpen book pricing; fixed price10Closed book pricing; price increases after agreement1
Human RightsGovernment regulated, match US guidelines10Major violations, must stay diligent with factory to avoid abuses5
Business EthicsHigh level of integrity10Untrustworthy2
Contract NegotiationsSimple and clear10Complex and adversarial1
Quality AssuranceDiligent and maintain standards10Quality creep4
Tariff ScheduleStandard8High and going up2
Training and HistoryJapanese trained, >40 years9Self trained, <20 years3
SourcingGlobal10Global10
Inbound CustomsNo issues10Major challenges3
Air Freight - Duration to US3-4 days82-3 days9
Reverse LogisticsNo issues10Agony0
Operator DependabilityStable, local staff, low attrition10Volatile, staff from remote areas, high attrition3
Operator ExperienceHighly trained and broad experience9Poor training and minimal experience3
Labor RateStable, unchanged in 5 yrs9Turbulent, rising quarterly5
Political EnvironmentStable9Unstable5
Susceptibility to Natural DisastersRare9Multiple yearly typhoons6
Chinese New Year Shutdown5 days914-25 days3
Environmental ComplianceStrict10Inconsistent and lax3
Total ScoreMalaysia179 of 190 (94%)China70 of 190 (37%)

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