Asking about private/sensitive issues is a bit rude in China. But I often say that, if a supplier gets offended too easily, he is not familiar with export customers’s requirements. And you might have problems down the road with his mentality.
I compiled a list of questions that will allow you to discover a bit more about each manufacturer you meet.
Questions about top management and their priorities
- When was the factory started? What was the previous job/experience of the owner?
- Is the factory profitable? What were its sales last year? And 3 years ago?
- What is the latest investment made in the factory, and how much did it cost?
- What is the next investment they are planning?
Questions about middle management
- Who will probably follow your order, besides the salesperson? How long have they worked in this factory?
- How many other orders do they follow?
- Where do the line leaders and the in-process QC staff come from? Were they promoted internally, or hired from the outside?
Questions about the workforce
- What proportion of workers came back after the last Chinese New Year?
- What is the employee turnover rate month over month (excluding the new year period)?
- What happens when an operator makes a mistake? Is she fined?
- Are operators paid by the number of pieces? Or by the hour?
- Is a part of their compensation based on the team’s results, or is it all individual?
Questions about the capacity
- Observe one line that is making about the same product as you intend to purchase. Ask for the output of this one line in one day. Then, based on what you see in a few minutes, calculate whether it makes sense.
- When the factory was set up, what was the expected (theoretical) capacity?
- What is the lead time from receipt of all materials/components to full packing?
- What materials/components do they buy? Do they only do the final assembly and packing, or they also make some components?
Questions about the quality management system
(See more checkpoints in a previous article about ISO 9000 factory audits.)
- How do they control the incoming components? Can you see it?
- How do they do in-process QC? Can you see it?
- How do they do final QC? Can you see it?
- Do they send samples for testing in a laboratory? Can you see the test result for a production batch that you point to them?
Questions about certificates and other customers
- Who do they work with? Can they give you references that you can call? Do they work directly with these customers, or through an intermediary?
- Can they show you the latest two purchase orders from a big customer they proudly mentioned to you?
- Can you see their business license, and their export license? Can you take them in photo to show your investors?
- The last time they made a big mistake regarding product quality and their customer found out about it after shipment, what did they offer as compensation?
What did I forget?