A lot of European, American and even Asian manufacturing companies get their products manufactured by Chinese companies. The main reason they do this is to reduce the labour cost, material cost and other operational expenses. This process is called as outsourcing. When outsourcing manufacturing to China some important points that you need to keep in mind are-
Hiring a Trusted Local Agent
You might be sitting in other parts of the globe and might or might not know to speak the local Chinese language. But it is always better to hire a local agent who will represent your company in China. He should have considerable working experience in China and also know the local dialect. He should also know the rules followed in your country, know English or your language.
Find the Right Manufacturer and Establish a Good Relationship
Finding the right manufacturer when you are located in other parts of the world may be a tough and daunting task. This is because you might not have the right contacts. However, China and Hong Kong has a number of exhibitions and shows every year where China’s outsourcing companies’ exhibit. The canton fair and Hong Kong Suppliers and Hong Kong Manufacturers (HKTDC) show happens at least twice every year. If you attend this you will be able to find the right manufacturer for your products. Subsequently it is better for you to establish a very good working relationship with this company before you outsource manufacturing to China. Understand their working and communicate your business policies too. Have in length dialogues to establish a good relationship which is very important for Chinese outsourcing companies.
Set Up Meetings, Inspections
Do not be satisfied with long distance calls. With your local agent, go and meet the company you are outsourcing your manufacturing process to. Visit their factory. Look into their safety procedures. Look into their manufacturing process. See if they follow ethical practices and it complies with your requirements and standards. Meet all local suppliers that the companies deal with. Ensure that every supplier also follows your requirements which might be required by EU or whichever regulation that you need to comply with. Also check if all their parts are recyclable and does not contain environmentally hazardous elements. Only if this inspection is satisfactory should you go ahead with the manufacturing.
Finalize the Company
If your meetings and inspections are satisfactory and if you are convinced of the Chinese outsourcing companies’ credibility then you can go ahead with the manufacturing process. Ensure you at least have a letter of understanding regarding this company being your manufacturer. Mention in it, your terms, defect rates, cost details, shipping procedures, etc before both the parties sign the dotted lines.