When it comes to manufacturing, many organizations are looking for the most cost effective way to handle operations. In some instances, companies have relocated production to China as a way to lower operational costs.

However, according to an article from the International Business Times, a key gauge of Chinese manufacturing activity dropped in February, increasing the concern in this area. The number to focus on here is the HSBC Holdings flash manufacturing purchasing managers' index, which dropped to a seven-month low of 48.3 in February, down from 49.5 in January. For context, a reading above 50 shows expansion in manufacturing activity, while anything under 50 indicates contraction.

"New orders and production contracted, reflecting the renewed destocking activities," HSBC's chief economist Hongbin Qu told the news source. "The underlying momentum for manufacturing growth could be weakening."

According to Capital Economics' China economist Julian Evans-Pritchard, the manufacturing conditions have continued to deteriorate. It has become much weaker than most expected, falling below even the lowest economist estimates.

The effects of these problems are also measurable. A recent article from Bloomberg Businessweek profiled luxury sports car manufacturer Aston Martin, which has experienced glitches in the Chinese leg of their supply chain. The company just had to recall 5,000 cars built since 2007 because of faulty throttle pedal arms that were breaking because they were created with counterfeit materials.

Every organization should continually examine its supply chain to make sure it is operating at peak efficiency. By deploying manufacturing business software, companies can get a better view of their business and make sure everything is running smoothly.