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How You Can Avoid Problems When Manufacturing to China

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How You Can Avoid Problems When Manufacturing to China

If you haven’t worked with a Chinese manufacturer before but are intending to start now, this article is for you. From the onset, we must inform you that you are in for a lot of positive gains, but you need to be ready for occasional production problems. One day you are panicking after a factory delays your products, the other day you are petitioning a manufacturer for refusing to rework substandard goods and another time you are running after a supplier who walked out on you without prior warning. Don’t get us wrong: There are many good manufacturers in China, but there is no harm in being cautious.

To set up a company in China, you must know and avoid the pitfalls that rogue manufacturers have led many foreign companies into. Remember that when it gets to product development, you have your own customers waiting for your deliveries, so you need a manufacturer who delivers quality products and in a timely manner. That being said, which mistakes must you avoid when manufacturing in China? How do you avoid them?

1. Entrusting manufacturers with your business interests

Trust is vital in business, but you must not trust anyone with your business interests. Do not forget that learning some words and phrases is crucial at the point so that you could do some basic communication. For more complex communication, a company that provides Chinese translation services needs to be hired so that no misunderstanding happens. When working with a Chinese manufacturer, avoid the mistake of allowing the manufacturer to control the quality of your products or the delivery time. Many entrepreneurs have made the mistake of sticking around even after realizing that a manufacturer or supplier is incompetent, probably because they are afraid to lose their pre-paid deposits. Tell you what; you would rather walk away and lose a small deposit than stick around and end up with substandard goods that will ruin your existing reputation.

Also, a small deposit may not be worth the frustrations that you will cause your customers by keeping them out of supply for long.

Another way of protecting your interests when dealing with a Chinese manufacturer is to always have an inspector or an agent on-site, constantly updating you on every stage of your product development process. A Chinese recruitment agency can help you find and recruit a reputable agent for that role. If the manufacturer tries any underhand strategies, you can easily stop them in their tracks. You will always be a step ahead of them.

2. Prioritizing fast delivery over quality

For what it is worth, quality must always come before delivery speed for as far as product development is concerned. Product development requires tons of time and effort to be successful. And because your customers want top-quality products, you must not compromise quality for anything. The challenge that is unique to China, however, is that when you pressurize the manufacturer too much, they may not tell you outright. Instead, they will lower the manufacturing standards so as to avoid possible delays.

On the other hand, there are reported cases of Chinese manufacturers’ hiking production costs upon realizing how much value you’ve attached to the quality of your product.

How, then, do you find a workable balance? Again, sending a local agent to supervise the manufacturing process would be a great option for you. Because the agent understands the Chinese business culture and language perfectly, he/she will know how to send your message across without scaring away good manufacturers and/or falling into the trap of quack manufacturers who hike production costs for no apparent reasons.

3. Relying too much on a manufacturer’s past reputation

Previous success can be used to gauge the performance of a manufacturer in the west, but not necessarily in the east. Chinese companies with reasonably good reputations have in the past frustrated many foreign investors, sometimes to the point of collapsing entire investments. Don’t make the mistake of trusting a manufacturer based on your past experiences with them; always be on high alert knowing that they can disappoint you at any moment.

The fact that a Chinese manufacturer hasn’t failed you yet isn’t a guarantee that they will not unexpectedly drop their manufacturing quality and damage your reputation.

There are many manufacturers in China today who are holding onto projects such as yours as their only means of survival. If you allow them the chance to rebuild using your money, they will fancy their chances without looking back. There are also manufacturers who are protected by government bureaucrats, so they don’t care too much about their reputation with foreign businesses. They will mess you up and continue with their daily operations as if nothing happened. You must, therefore, never drop your guard: Always be hands-on and control the behavior of your Chinese manufacturer.

chinese new year

Here’s How Your Business Can Prepare for Chinese New Year Shutdowns

It’s that time of the year once again where Chinese New Year is around the corner and preparations throughout Asian countries are underway. Countries including Korea and Vietnam are also expected to participate in the Lunar New Year celebrations around the same time as Chinese New Year, requiring other global businesses to consider what preparations need to be made in advance to ensure operations aren’t put to a halt.

In a report from Dachser Logistics, it’s estimated nearly 80 million Chinese workers will be traveling to their hometowns to honor Chinese New Year – also called the “Year of the Rat.” During this time, the Chinese manufacturing infrastructure completely shuts down, from businesses to factories for up to four weeks in the region. Dacher goes on to report that this can impact production for up to two months and lists various ways businesses can be impacted:

-All business during Chinese New Year will face delayed production time, as will quotation requests.

-Many workers will not return to their workplace immediately after the holidays, which means previously estimated production times might be extended.

-If orders are placed late, it is possible they will be placed further back in the production line.

-With more than a month’s worth of orders backed up to start with, factories will favor orders from their preferred partners.

“With the upcoming Chinese New Year period, it is a time of many challenges for importers and exports. Proactive planning and preparation are key to effectively navigate and managing supply chain issues that could occur during this time; ensuring that freight is handled consistently and without interruption. At Dachser, we aim to minimize any impact to our customers.” said Guido Gries Managing Director, Dachser Americas.
“We have reviewed the critical steps that are needed to prepare for Chinese New Year with our customers well in advance. This proactive preparation helps to ensure that there is minimal disruption to their global supply chains.” added Gries.
Dachser Logistics is no stranger to effective planning, however. The leading global logistics provider ensures its customers know exactly what measures can be taken to avoid delays, when holiday business hours take effect and how to keep the supply chain running for each anticipated holiday or possible disruption. These tips are as follows:

-Build up adequate inventory, considering a period of up to four weeks after Chinese New Year and even find out if your Chinese source has inventory in non-Asian locations, so you can use other supply chains.

-Inform your forwarder about your priority shipments, in case there is limited space.

-Book shipments well in advance of Chinese New Year.

-Reserve space on passenger flights for shipments that cannot be delayed. The rates are slightly higher, but this measure will keep your supply chain running.

Source: Dachser Logistics