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Chinese suppliers and subcontracting

Supplier ManagementI just came across an interesting post (“6 conversations and a couple of cultural lessons“) on the SRI blog. In the last paragraphs, David Dayton evokes the sub-contracting habits of Chinese manufacturers:

Chinese factories ALWAYS sub work out to other factories. (And no, I’m not exaggerating. Always is the right word.) But they never do QC. I have not, in 7 years, ever had a factory do QC before they accepted product from a factory that they’ve sub’d work out to. They always act so surprised that we reject sub-standard product that comes from someone they’ve “cooperated with for many years.”

Is it true? Yes, 99% of Chinese factory owners would dream of sub-contracting all their work to cheap workshops and pocketing the margin. But they have to have some kind of operation going on, to show what they can do and get some orders. So, with a factory in place, technically they have to do some of the job in-house. Then they sub out some work when it is more cheaply done outside, or when their capacity is full. Without advising their customers, of course.

I remember a factory boss explaining to me that he would not outsource the production of those of his customers who did not expressly forbid it in their contract. But the others, naturally, would not have that luck. He framed it like it was a huge favor to his most experienced buyers…

There are two big problems with this behavior:

-1- As noted above, a Chinese factory does not check the quality of its subcontractors’ work. Once again, it is not true 100% of the time (maybe 98% of the time?). I have seen factories that were organized more like traders (or rather, traders with a workshop) with QC people traveling around.

Why this absence of QC? As Dayton writes, “if they did that, they’d lose face and damage relationships with their sub-suppliers”. It’s the same lack of enforcement that caused Mattel to recall millions of toys: the toy supplier would not check on his own paint supplier, for the sake of good relationship!!

-2- The importer often visits a nice-enough factory, and his production is completed in another place. This other workshop is generally less organized, and the average outgoing quality is usually worse. Why? Because the “main” factory wants to buy for the lowest cost!

Comments

  1. I am a tailor in the USA and I am looking for a CMT house out in Hong Kong, how do I get in touch or reach one of this CMT houses?

  3. Dear Renaud,
    I too am looking for a CMT house and/or reliable consulting agency in HK/China for a clothing line. If you have relevant contacts please let me know.

  5. i want to start little size factory for clothes in Bulgaria and to sew for big companies in eu/us (or how you call it CMT orders)… the question is how to contact with them for orders.. when you are small, no once notices u 😀 valnetine, thanks :)_ corsargroup@gmail.com

  6. I am urgently looking for a chinese cmt either in South Africa or China for my clothing line. I am based in South Africa.

  7. Hi, We have just finished setting up our new CMT factory house in Humen/ Dongguan..
    buying/pressing/packing/cutting/QC all is done inhouse…
    We are an Australian fashion production House who was feed up with the endless run around we received from suppliers and other chinese operated factories –
    We can produce small MOQ’s of 150 pc’s to larger orders of 5000+ units per design.
    for further info, or just to chat you can contact me on globalprodigy04@netscape.net

  9. But what should I do? With a very limited budget but a big client interested, I want to manufacture an inflatable Stand Up Paddle board in China (because it is just to expensive to make them in Holland).
    In the meantime I can confirm that promisses are easy made by Chinese manufacturers but to keep them is quite different.
    How can I find a good intermediar and/or manufacturer who have experience with inflatable SUP/surfboards, processing PVC dropstitch, kevlar etc.

    Rein info@adamboards.com

  11. Hi a need help I’m starting a CMT fashion designers production house,what will be very important that will be needed expect the infrastructure and sewing machine.

    Thanks Sellina
    South Africa

    • Sellina, where are you based. I am in North West and would like to sell my small Clothing Factory to somebody who would like to expand. My business is 4.5yrs old but because of health problems, I have to sell.
      Yvonne van Vuuren
      Cell: 082 455 5179

  12. I am urgently looking for a chinese cmt either in South Africa or China for my clothing line. I am based in South Africa.