I had a good discussion with a client whose background was in auditing for a Big Four accounting firm. He pointed that audits, in that context, is mostly about looking at what happened in the past. In contrast, when buyers request factory audits, the purpose is: To identify risks by pointing to gaps that might have a serious impact on business performance (and to avoid giving much business to a high-risk supplier) By making the most serious gaps obvious, to put pressure on the … [Read more...]
Chinese Suppliers Are Getting Less Flexible. Now What?
About 6 months ago, I wrote how Chinese fabric suppliers and dyeing houses were giving headaches to the whole supply chain. It had a serious impact on Chinese apparel suppliers (many delays, higher costs, higher MOQs for fabric...). And, in turn, those suppliers got more rigid when dealing with their overseas customers. The attitude was "that's the way it is and we can't make miracles, so just get in line". That's actually an overall trend, in many industries, from what I have heard. … [Read more...]
How To See if a Chinese Manufacturer Is Capable of Improving in the Future?
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. … [Read more...]
How To Cooperate With Your Chinese Supplier, Part 15: The 7 Major Risks You Run With Your China Manufacturers
I listed the 6 ways Chinese suppliers cheat importers a few years ago. But, with proper due diligence, the risk of being cheated outright goes down a lot. The major risks that experienced importers run, when working with a new manufacturer in China, are mostly related to issues of motivation and trust. To be sure, there are many good manufacturers in China, but you should be aware of the pitfalls and watch out for them. My partner Fabien and I made a list of 7 common issues we have … [Read more...]
Why Do Most Chinese Dislike Processes?
I have written many times that most Chinese people are not process thinkers. By this I mean they tend not to spend time thinking of HOW to do something: what steps should we follow, what resources do we need, what results should we expect, how to optimize our approach, what issues can come up, etc. I was discussing this recently with a friend (from mainland China) and he had an interesting perspective. There are three reasons behind this, in his mind. 1. They want to show they are … [Read more...]
Reset your Mental Models when Buying in China
Every year, tens of thousands of new businesses start purchasing directly in China. And many of them have a bad first experience. The key to successful China sourcing is not a set of tools -- it is primarily a change in mental models. For example, here is a dangerous way of thinking: "It is the supplier's responsibility to ensure my products are made up to specs, in responsible working conditions, and shipped on time." Well, not really. When you buy in your own country, it is true. But … [Read more...]