Why is it important to visit regularly your chinese supplier ?
We are time to time facing situation that we would not expect.
We like to tell what we see and hear to our customers. We never hide real and current situation to them. Sometimes, buyers operating purchasing in China via our services are wondering why is it so important to be on the ground and regularly visit factories and suppliers even when everything is going well.
The answer is simply not very long:
In China, everything is going fast, very fast. Changes are quick, mutations are unexpected and strategy need to be constantly adapted to new situation.
As a professionnal sourcing company China based, our job is to find and qualify chinese factories on behalf of our clients. The typical process is:
- Gather information about product specification and client recquirement
- Formalized and translate a precise recquirement
- Operate china sourcing operation
- Operate shortlisting
- Perform factory audit at the plant
Most of time, at T time, everything is fine and you start working with this supplier who was qualified for different reasons (professionalism, specialization, infrastructure such as machine, product range, control of the whole production process, etc..).
Sometimes after few months, the supplier is changing:
1./ Start to outsource some process to increase margin because machine get old.
In this case, most of them don’t give access anymore to the sub contractors and you loose control on the Bill of Material.
We have seen case where electronics factory owned SMT machine to produce electronics at the audit time and didn’t have them 1 year later and outsourced those process to another factory.
Of course the supplier didn’t want to let know the sub contractors, and when things went wrong on an electronics component, they were unable to give us a rationnal explanation about what was the brand of the component that was used.
As a result we turned back to another manufacturer who gave us access to the whole Bill of Material.
2./ Diversify activities in other products which sometimes are totally different from the original know how.
And then, the professionalism of the supplier is diminishing on the product you initially was coming for.
Believe us or not, but we have seen case where factory producing electronics, start to raise birds and parrot with incubator as a zoo to make money considering that electronics was not an enough lucrative market.
3./ Remove or stop activities of some department to reduce cost on workforce.
This is critical when a supplier cut notably the presence of a quality control team. It is also a problem of production capacity when the workforce is diminished.
4./ Is acquiring new customers.
So your order don’t get priority and you get a lack of interest and consideration for them and order and purchasing operation in China becomes more difficult to control.
5./ Behavior is changing.
We have seen while performing in china, quality control operations, some suppliers producing similar products then our customer’s one for others overseas customers whereas our own customers had design, patent and copyright on those product and didn’t give authorization to the manufacturers to sell by himself.
Of course the customer amazed to see its products sold by factory with just a small change of sticker and name on it.
So, for all those reasons, and in order to be able to adapt back up strategy, regular presence on site at Chinese factories is necessary and mandatory at any time, even when things appear to go well.
The other reason to be on site is to understand process, difficulties faces by supplier and operate corrective action plan at the earlier stage while the production is still running.
Suppliers have some difficulties time to time with production and product, and sometimes they are not able to face them by themselves by lack of skills. We have seen numerous suppliers having, workforce, capital, machine, infrastructure, but not enough educated people to solve problems.
The goal is to educate properly the right people (and hoping he will not leave the company too fast), more than dictate, fight with contract, payment or court.
We have met every kind of suppliers: nice, bad, honest, dishonest, skilled, unskilled, willing to learn, willing to make money more than everything else.
All those tensions can be smoothed by meeting them and facing them. Having diner or even a KTV with them. This is diplomacy and this can only be build by being present on site to shake hands and getting complicity.
This is the reason why we attach a high importance to our buying office services in China
Chris for the sourcing company in China: Advanded Asia Sourcing
Personnal blog: China Buying Agent
