Outsourcing production to China can offer real benefits to Western companies - improving the international competitiveness of manufacturers, and enabling new product development projects to get off the ground. Yet we estimate up to 50% of China outsourcing projects fail to get going, due to basic principles not being followed by the factory and customer.
To get your project right from the start a number of critical success factors should be considered, including:
- - Never select a factory because they are the cheapest – you get what you pay for and China is no different. Of course price is important, but don’t forget about service, capability and overall commitment to quality
- - Assume nothing and define your requirements in detail – provide detailed drawings and all your requirements at the earliest practical stage
- - Finish your product development at home – send over complete engineering drawings to your factory to prevent delays later in the process
- - Use a third party to inspect product quality before orders are sent over – prepare your own quality check lists and unless you can afford the time to go to China for every order be prepared to use a local QA agency
- - Never pressurise a factory to speed up production times – this always leads to problems. Instead find ways to build new lead times into your own delivery schedules
- - Agree terms and conditions that clearly specify the issue resolution process
- - Prepare for a learning curve – and take time to build up your confidence in the factory. Expect the unexpected, deal with it proactively and work closely with your factory to ensure it doesn’t happen again
In summary select the right factory to start with, build the relationship through regular visits or an agent, work with your factory as a partner, and most of all be prepared for a learning curve along the way
