Deciding which factory to work with in China is very difficult. It is important to get advice from experts with a strong base in China and true understanding of your company and your market.
There are a number of options:
If you are making contact with specialists you need to take great care. There are many horror stories of companies investing time and money in China-based research for little or no return. You should do due diligence on any specialists you are planning to use, including any China ‘affiliates’.
Key steps for finding the right partner – China Factory Selection
Companies looking to find the right manufacturer need to take the following steps:
How to do perform due diligence on manufacturers
It is important to research any manufacturers you are considering doing business with to ensure that they are reliable and are capable of doing what they say they can do.
There are three basic quality levels of Chinese products:
You need to make sure you are dealing with the latter, including the factory’s suppliers and sub-contractors. Ask for reputable client references, but don’t be surprised if none are forthcoming.
A factory ‘outsourcing the outsourcing’ can be a difficult issue to get to grips with. A number of international companies have come to grief not because they chose the wrong factory, but the factory was using sub-standard components supplied by a sub contractor. Components suppliers all too frequently try to use lower quality materials for production to save on costs. If the product you make is complex with many components then this must be a key concern. This is a very common problem and the solution is regular and very strict quality control in the factory in China.
Factories often will not be upfront about their outsourcing. It’s not necessarily a bad thing – it can help to cut costs – but you need to be aware of it because it can complicate quality assurance. If you can, go to the sub-contractor’s factory and see it for yourself.
It can be hard to verify whether a China factory is committed to the labour and environmental standards that you need to be able to sell your products. Arranging a Factory Audit in China before starting to work with a new factory is highly recommended.
Check out our China Buying Office or ODM Procurement websites for more information
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