Making a great job of sourcing from China
Cottam Supply Chain Management was originally established to manage the supply chain for Cottam Brushware Supplies. Now the chosen partner for a range of industries Cottam SCM can help you make a great job of sourcing from China.
Our 8 top tips for sourcing from China are:
1. Know what you want
It sounds obvious but do you really know exactly what you want? Do you know the grades of materials your product should be made from? Do have colour reference numbers? What about surface finishes and packing specifications? Is your artwork easily accessible in digital form? In reality, most people don’t know everything but you can start by initially focusing on the most important stuff.
Get it all written down and clearly defined. If you don’t know something, perhaps the weight of cardboard used in the packaging – then find out (or say you don’t know). You can’t get upset later if your quality standard has not been met, if you haven’t said what it is. Avoid ambiguous or generic terms such as ‘Heavy Duty’ or ‘Professional’. China is so culturally different that you cannot assume that suppliers will know what your product is used for or what is important about it.
2. Find the right suppliers
There are so many capable suppliers in China. Spend some time finding the ones that you can work with. Are they capable of making what you want? Is their scale appropriate – too big and they will ignore you, too small and they might struggle to keep up. What about location? This matters more on some products than others but think about proximity to ports to get goods out and airports to get yourself in.
Are they familiar with working with UK businesses? Not a deal breaker if they aren’t, but it is something you should be aware of. Do they want your business? What about ethical considerations? Some of this can be ascertained from distance but as you narrow down your search it’s very important to visit factories and see first-hand whether the reality meets the promise. If you can’t do this personally then see the next point about finding partners.
3. Use partners
Find experienced partners that can help you along the way. Working in China is hugely rewarding but it’s not easy. If you can learn from others then you might avoid making a mistake or two. Ideally you want staff on the ground who can meet with suppliers regularly, check quality and keep your name high in the thoughts of the factory management. If you can’t do this yourself then work with a UK based agent that can do this for you.
Again, check that they regularly travel to China and have QC on the ground in China (and in the right geographical locations). You’d be surprised how many don’t! Also consider joining the China Britain Business Council (CBBC) as they have knowledge and people on the ground in China. Some partners will need to be in China…. want to know about Chinese VAT or tax rebates? Local advice rules.
4. Manage quality on the ground
If you’ve clearly specified everything at the start of a project then this will be much easier. However, it’s still worth keeping a close eye on this to avoid a nasty surprise later down the line (or worst case when the goods arrive at your door). Typical markers for quality management are:
a) Approval of pre-production samples. These are representative, often made my hand and used to provide feedback to the manufacturer. They are unlikely to be perfect.
b) Approval of initial production parts (just after production starts).
c) Final inspection prior to shipping (after production is finished).
Also, consider product and transit packaging at an early stage too. Minimising space is key for low shipping costs but not if your products get damaged in transit due to lack of packaging.
5. Show your face
If you do try to manage the process by email from the UK you stand a very good chance of getting stuck. Email has a place but it’s not the preferred method of communication in China (phone calls, instant messaging, and face to face meetings rule).
Get as much face to face meetings in as possible if you want to be taken seriously. Also make sure that communication is two way and listen to the advice on offer. Your suppliers will have valuable suggestions that can save you time and hassle. Tap into their expertise and don’t assume that you know best!
6. Be realistic about costs
Does all of the above sound expensive? It is! Anyone who tells you otherwise isn’t doing it properly. Work with your agent at the beginning and set a realistic budget. Souring from China is competitive but it’s not cheap. Part prices may look attractive but make sure that you budget for transport, taxes, your time and any other on costs.
7. Learn a little about Chinese business culture
This will be well received by your Chinese business partners but in truth will save you some frustration. I’ve been to China with UK nationals before and it’s quite humorous to see them get frustrated with minor aspects of Chinese business culture.
Some things are mistaken for rudeness or disorganisation but are in fact just cultural differences. If you’re going to get upset with someone answering a mobile phone when they’re in the middle of a conversation with you then China is not the place for you!
8. Don’t forget about logistics
Okay so you’ve got your product manufactured to your exact standards. How are you going to get it home? Well firstly, don’t leave it to your supplier. Their expertise is likely to be in making your product, not getting it to you. Find someone who knows how to move goods around the world. Your UK agent may offer this (but dig into their competency levels) or you can appoint your own freight forwarder.
If you take this route try not to shop around on every shipment but find a freight forwarder who you can work with longer term. They will help you get good overall value and keep your paperwork right. Finally, don’t expect to get it right first time. This is complex and time consuming process with plenty of opportunity to make mistakes. The more you do, the better you will get.
Find out more at www.cottambrush.com/pages/supply-chain-management or contact us on 0191 4282510.
This article was first published on www.bdaily.co.uk on the 21st August 2015.