Outsourcing your company’s product is something like traveling to an exotic destination for the first time. You can take your chances, pack a few things in your suitcase and leave the rest to chance, or you can find a tour operator with extensive in-country experience and knowledgeable guides. While the first option may be packed with more thrills and adventure, you’re likely to see, learn and profit much more from the latter. (What’s more, “thrills and adventure” are probably not what you’re seeking for your company’s bottom line!)
Even experienced travelers rely on the knowledge of skilled guides to navigate geography, dialects, culture, customs and laws and offer valuable behind-the-scenes knowledge. A tour operator’s assistance begins long before you board your plane, helping you anticipate what to expect, how to pack and how to get the most from your travels.
If you are thinking seriously about outsourcing a product, start by taking this brief introductory tour. It will help you understand what’s involved and how to avoid the most common outsourcing mistakes for China sourcing.
What is full service sourcing?
Outsourcing a product to China involves more than simply e-mailing a set of plans to someone at a factory. When Trans-Pacific Facilitators talks about full service sourcing, we mean that your company works with us as an outsourcing partner who can manage your product/product line all the way from drawing to delivery.
At the very least, your product designs and all instructions need to be translated for the factory and local managers; however, in addition, your design may need to be refined to meet equipment capabilities or export requirements. Your partner will source raw materials to assure adequate and timely availability and will identify and interview competitive factories. Your partner will be able to advise you on the risks, work with you on contracts and negotiate on your behalf. Your partner will handle and oversee scheduling, quality control, testing and delivery.
Do you have a new or existing lighting or electronic product you’re considering for manufacture in China? Why not contact the outsourcing experts at Trans-Pacific right now?
Do it right the first time
Work with an outsourcing partner to avoid common outsourcing mistakes, such as…
- Assuming the factory will operate on the same principles as your factory at home. For example, do you know whether the factory be manufacturing other products at the same time it is making yours and, if so, how will materials and inventory be supervised?
- Failure to define your priorities. What’s most important: Cost? Delivery? Matching a competitor’s product? Choosing a factory that will grow with your product line?
- Failure to understand/define how your outsourced products will integrate with your resident products and core business and how to assure that goal is met.
- Failure to consider or accept recommendations for improvements. Outsourcing offers the opportunity to incorporate new efficiencies. An outsourcing partner that has product expertise may be able to make recommendations that can save you money on manufacturing and increase profit on sales.
- Assuming there will always be someone available to handle problems (in English). For example: your customer, a big-box store, changes shelving specs, which means that your product packaging will have to be adjusted. Who do you call?
- Assuming everything will be okay: a contract, a handshake and think no more about it. Communication is critical before and during outsourcing operations. Haphazard communication failure to designate a primary communicator at both ends can mean mistakes, lost time and unnecessary expense.
- Assuming that a single factory visit will be sufficient.
- Failure to “measure twice,” double-checking plans and designs before manufacture and asking for and approving product samples.
- Failure to implement a reporting system with measurable goals. Accountability begins long before your product arrives at your warehouse; it should be built into every stage of your outsourced operations, including detailed information on the “who” and “how” of inspections, reporting and other aspects of accountability.
- Outsourcing the wrong aspect of your business. Almost all components of your business can be outsourced; that doesn’t mean they should be outsourced. Which aspects of your core business belong at home and which, for economy of scale or growth opportunity, make the most sense as offshore operations?
- Putting cost ahead of other considerations. Remember, your company’s reputation will be affected by this product.
- Failure to consolidate operations through a single outsourcing partner. Some companies try to save money by working with independent offshore vendors, such as materials suppliers, shippers, factories, staffing/personnel experts, and so on. While that approach may work for your local operations, in offshore outsourcing situations, it often breaks down the flow of manufacture and ends up costing much more.
- Failure to consider security and risk and detail risk management during negotiations.
Experience and expertise
In choosing an outsourcing partner, you want to work with sourcing professionals who have in-country manufacturing know-how with solid references as well as product-specific expertise. Your outsourcing partner will serve as your eyes and ears in all aspects of your foreign operations; your partner needs to have the depth of knowledge and communication skills to recognize and resolve problems before they become critical as well as to encourage and support the smooth flow of business.
Outsourcing is a two-way proposition. Yes, you want to find an outsourcing facilitator you can trust to act wisely on your behalf. But you should plan to communicate with that person regularly, respond to inquiries and review reports so that there are no surprises along the way.
Don’t just trust the name on the business card or website: interview potential outsourcing partners, ask questions, ask for and speak with references. Your product – and your business – depends on it. Call Trans-Pacific Facilitators now and let’s talk about making your business more profitable by outsourcing to China.