Factory tours in China: what to watch out for

Here are some interesting or useful articles that I found recently.

Supplier Evaluation: What should I look for during my visit?

Etienne Charlier gives an excellent overview of what criteria buyers should take into account when evaluating factories:

• Ability to make the products;
• Consistency in producing at the required quality level;
• Maturity (not relying on one key manager, but on a system and a competent team);
• Formal documents: business registration, licences, certifications…

Sourcing Safe Products: Why You Must Know Your Factories—And Their Sources—Inside Out

This long article focuses on a few large North-American importers. These companies have addressed the compliance to safety standards head-on, and do what they can with regards to social responsibility.

They also share a checklist they use for evaluating Asian manufacturers.

China Reality Check. Please.

Send this link to people who are not familiar with China’s business environment! In this very clear and enlightening piece, Kurt Braybrook explains what every importer should know.

Before reading it, I had not made the link between the bad habit of announcing problems/delays at the last minute and the country’s history of punishing those responsible for bad news. Which brings me to the next article…

Why Didn’t the Factory Tell Me Earlier?

Jacob Yount takes the factory’s viewpoint and decrypts why importers’ expectations are often misplaced.

If you work with small/unprofessional suppliers, you need to make their life as easy as possible, or they might turn down your project at the last minute…

3 ‘Auto-Reminders’ To Set During Production

Liz Long advises to set up a regular weekly meeting (over Skype, for example) with each supplier. She writes:

This enhances consistency and accountability in the relationship, and gives your partners a friendly nudge to stay on schedule.

I couldn’t agree more!

China’s Angst: When Low-Cost Manufacturing Dies

Mark McKay says the Chinese manufacturers are at a crossroads. I totally agree. Less than half the current factories will survive over the next 5-8 years, I think.

But I don’t agree about the level of awareness of these manufacturers. McKay writes:

Many of these companies built their entire business model around cheap labor. Now that advantage is gone. Most Chinese business owners realize that they need to radically change their thinking about concepts of quality and productivity.

Unfortunately, very few realize this need for radical change. Let’s give them a few more years… if they are still around!

China now churns out high value goods – new evidence

One of the reasons Chinese manufacturers are not so desperate is that many of them are nicely positioned on a growing market. They are moving up to more technical products.

In this article, Etienne Charlier shows data that support this trend. Fewer T-shirts and shoes, more industrial equipment and car components.

Insourcing: A twist in the China plus one strategy

Global Sources’ editorial team gives us an update on the “re-shoring” movement of production from China to the US. It is still very marginal, but is slowly gaining steam.