In China, there are a few entirely different breeds of manufacturers you can work with. One of them in the contract manufacturer (CM). Working with a CM makes sense when you purchase relatively high volumes (e.g. more than 10,000 pieces a year for electronic products). You will get the best results in cost and quality with a CM. In OEM, ODM, Contract Manufacturers: Choose your China Supplier Wisely, we listed the pros and cons of working with a contract manufacturer: Pros: The buyer … [Read more...]

When an ISO standard is a set of "requirements", like ISO 9001, it is often seen as a constraint. It is like a law. It is not fun. When it is a set of "guidelines", though, it is only positive. The standard is full of advice on how to do something well! An example is ISO 9004 -- which gives advice on how to be ISO 9001 compliant and how to go further. If your company has auditors who work on management systems, you might want to look at the new version of ISO 19011. It covers the following … [Read more...]

Three years ago, in Comparing Wages Across Asia to Make Sourcing Decisions, I showcased 2 analyses large companies tend to do before they decide on their sourcing strategy. These data are key measures of the competitiveness of producing countries. At the time, I explained: Naturally, most companies that want to compare Asian countries tend to do so on the basis of easy-to-find numbers: minimum wage levels. The conclusion is usually “China is not competitive; the future is in Vietnam, … [Read more...]

If you have quality requirements that are challenging to one of the factories you work with, or if you are working with them to develop a complex new product, you might discover that it makes sense to help them. It sometimes makes very good business sense. Spending 10,000 USD might save your company 1 million USD in the end! And yet, there is a point where you can't keep "helping" them all the way, as they start to take the habit of being "baby-sitted" and they reduce their … [Read more...]

By Fabien Gaussorgues Do you prefer to work with an OEM or an ODM? What are their pros and cons? And what is a CM? This is particularly important if, as the importer, you want to develop a product that is different from what is already on the market. The advice in this article is especially suitable for mechanical and/or electrical products. First of all, what do those acronyms mean? Here are simple definitions: Original Design Manufacturer: the supplier provides the design and … [Read more...]

I wrote 2 articles about the similarities and differences between product inspections and factory audits on the SynControl blog. I thought it would be interesting to mention this here, too. Here are the main points I mentioned. Main similarities: factory audit vs. product inspection They are done on-site, at the production facility. There are exceptions to this (e-audits, review of a few samples...), but they are exceptions. There are bribery risks. Following a code of conduct is a … [Read more...]

Many people think auditors go on site, look at the situation, and suggest improvements. However, it is not that simple. Auditors acting as consultants can cause several types of issues. And yet, the line between these 2 roles is often very thin... I have spent time working in each of these roles, and I wrote my observations below. Let's look at each separately. What is the purpose of an audit? To establish to what extent an organization complies with a set of requirements (often based … [Read more...]

Last week I wrote about the best way to have a Chinese supplier take responsibility. However, the most important question, I feel, is how to work with manufacturers that will keep improving over time. And it all starts from supplier selection. If, at the sourcing stage, you don't try to work with people and companies that will tend to improve, you are sabotaging all your other efforts. Here are 5 areas I'd look at. 1. Is there professional management? Or is it operated by the owner and … [Read more...]

I used to believe that Chinese manufacturers were great at sourcing their own materials/components. There are many reasons for this: They are based here and have teams who can go and visit local suppliers. They have extensive networks they can tap for suggestions. They consolidate buying power for many customers. They have mastered the art of selling to oversea companies. They know how to 'make deals'. And yet... After reviewing the way they manage their procurement, I have seen … [Read more...]

If you have followed the advice of part 2, you may have found a few interesting suppliers. The next step is to confirm that they told you the truth and that they are reliable. Even if you place one-shot orders, you should spend a little time to check if a potential supplier is legitimate. You don’t want to fall victim to a scam, do you? There are three main ways you can verify a manufacturer: Background checks You want to avoid scammers who will run away with your deposit, but … [Read more...]