Home      About Us      Contact     




 

"Professionalism is not just a word - it's a way of life"

Charles Chan
Managing Director

 

Outsourcing


China was once seen as an option for producing only relatively simple products. Yet, significant improvements in Chinese manufacturers’ sophistication, technology, and—most importantly—product quality have made China much more popular for OEMs.

Popularity, however, does not always guarantee an easy process. Finding the right factory can be challenging. The steps below are the minimum which we carry out on behalf of our clients, prior to outsourcing to China.


Identify Product Manufacturers

The Internet is being used more readily by Chinese manufacturers as restrictions on import and export rights are relaxed. In the past, Chinese manufacturers used government-approved trading companies to export, so manufacturers often did not have their own Web sites. As restrictions have now almost disappeared, Chinese companies have embraced the Internet as a tool, and there is now a wealth of information for OEMs looking to build relationships with contract manufacturers in China.

Chinese manufacturers are increasingly comfortable with international companies. They often use English as their secondary business language.

It is critical to conduct a survey based on local knowledge, as  business-to-business hosting sites, compile lists of Chinese manufacturers and provide information on companies’ backgrounds, products, and contacts. These hosted sites can be useful, but they typically list only member companies, and many high-quality Chinese manufacturers may not be listed. We will spend the necessary time to locate the specialist company, specifically able to meet and exceed your requirements


Initial Planning and Communication

After compiling a list of potential manufacturers, we will contact the companies.

The time difference is often an unaccounted-for hurdle. Be sure to factor in the time difference and allow both companies several months to build trust. It is unrealistic to expect finalized results after the initial calls and e-mails.

When contacting Chinese companies, one of the first and most obvious questions to ask is whether they can manufacture the product to your exact specifications. Some Chinese companies realize that their products will not meet European standards, and they often say so directly to avoid wasting time. However, it is critical to understand that some may claim to be manufacturing the product while making plans to purchase it from someone else, mark up the value, and then sell it. This is where our offices and highly trained staff in China become invaluable. we take nothing for granted and check everything down to the most minute detail.

The price quote is not the only cost consideration needed to arrive at a fully priced estimate. While the manufacturer’s unit price may seem very low at first, this cost can balloon once international freight forwarding, customs duties, and domestic shipping issues are factored in. Additional costs can also arise from unexpected sources, such as expenses related to travel, cultural differences, language barriers, and time differences. These costs are difficult to outline, but a general estimate should be calculated into the price.


Know the Difference: Factories versus Trading Companies

Relaxations on import and export regulations have led to an increase in direct exporting from Chinese manufacturers. Trading companies, however, are still common in China. Trading companies that act as go-betweens for manufacturers and buyers usually have experience with Chinese exporting. There are certain advantages to using trading companies rather than going directly to the factories.

If your company is looking to outsource, then these trading companies are a waste of time and should be avoided at all costs.

Building relationships with Chinese factories offers more opportunities to develop company brands. It also allows companies to be directly involved in the quality control process. Companies with an in-house sourcing group may decide to work directly with a manufacturer. Quality control issues for a factory require frequent communication, and an in-house sourcing team can handle this responsibility. Without such a team or significant resources from an outside firm, however, it may be difficult to monitor issues as they arise. Once again we handle this entire process for our clients.


Negotiate the Contract

Contracts with Chinese manufacturers should be concise. The contracts should be similar to contracts with domestic companies, but a few points deserve further attention.

A recognised Chinese Law firm is the only credible method. Our legal department will assist in anything required to guide you through the process.


Quality Control

If the shipping terms negotiated in the contract are for FOB, the buyer is, in effect, paying for the goods at a port in China but will not inspect them until they reach the E.U. If there are quality issues after the goods arrive, it may be possible to have a new order sent or to cancel the order, but this will lead to costly delays in delivery times. The best way to protect against such problems is to have a thorough quality assurance system in place in China.

Our world renowned T.Q.M. system garantees that the product is manufactured to exceed your Incoming Quality Control standards and is automated to give remote - independent - inspection and validation.


Conclusion

China represents a huge potential market OEMs—and that potential is increasing. As China becomes more integrated into the world economy, its manufacturers are becoming increasingly sophisticated and better equipped to meet the needs of E.U. companies.

By using the steps outlined above as a starting point, it is possible to avoid some of the pitfalls associated with outsourcing manufacturing to China. China may seem exotic, or at the very least, extremely foreign to E.U. OEMs. However, careful planning, thorough research, and patience can help overcome the challenges that China presents and reap the rewards it offers.

For more information please do click here or Contact Us with your requirements at your earliest opportunity

   Affiliated Links - click Here

Copyright © 2005 Global Quality Solutions ltd. All Rights Reserved