We asked one of our clients to give us their impressions at a China factory visit during procurement recently. Read below to get an idea of how they felt during this trip regarding building up a factory network. This is one of a series of blogs that we will title: Buyer Diary.
Importance of Factory Network
What is a factory network? It is basically a list of factory contacts which you work with or have a business relationship with.
Building up a factory network is important as explained in China Factory Visit – Buyer Diary #1: Culture & Customs. Businesses in China emphasize on relationships. In order to do business in China, one must have forged strong relationship with the factory. Well, trust is a major factor here. Therefore, building up a factory network is highly important to survive and do well as a business in China.
Why Building a Factory Network
There are definitely many reasons to build a factory network. We’re going to point out the various reasons from different points of view – the clients’, and the factories’.
From Client’s Point of View
- More price references for quoting
When quoting, it is important to get quotes from a few factories as reference. Not only will we be able to compare pricing, but also check out the market rate. In any case, abnormalities can be easily identified. Take for example; when a factory quotes double of others, we are certain that the quote attained for this factory is not accurate. We can read more at China Factory Visit – Buyer Diary #4 Pre-Production.
- Able to have back up factories easily
Chances are, we will have times when we need a ‘Plan B’. With a good factory network, this will not be a huge problem, considering under stressful circumstances with tight deadlines etc.
- Gain advise from other factories
China Factory Visit- Buyer Diary #15 Manufacturing Problems has explained the many problems which we might face during production. During such circumstances, it is best to consult professionals in the same line of industry. Factories are then the best people to go to. With a good factory network, we can easily gain good advice from other factories when dealing with production. We will then be able to solve potential problems efficiently without delay.
From Factories’ point of view
- Seek help and advice easily
It’s always easier as businesses to survive with support from other organizations, isn’t it? Works the same for factories.
- Be in the inner circle of the industry
In any industry, it is important to keep up with the market trends to be ahead of competitors. Through having a good network of the inner circle of the industry, keeping up with market trends seem almost automatic.
- Shared and increased profits
With good network comes partnership and therefore higher shared and increased profits. It is always a win-win situation in this case.
How to Build a Factory Network
- Choose to work with good factories
It is wise to build a factory network; of course this network has to be a valuable one with capable factories. There is no point having an entire network of factories which cannot perform, and in turn create losses. In this case then, how do we list out those of which that are trustworthy factories? There is no outright checklist to judge, however such judgments come with experience and it is best to work with professionals when dealing with factories.
- Take the opportunity to work with different factories
By working with more factories, companies have an opportunity to build a larger factory network and get to understand this industry much better. Also, this will be part of the experience to be able to differentiate the responsible factories and those which are not.
- Maintain good relationship and build rapport
The key to build a strong network is definitely to maintain good relationship and build rapport with the various factories through giving factories orders, or even potential ones.
- Offer long term partnership
Especially when you have found great factories to work with, and it is proven so by past collaborations, offer a long tern partnership if circumstances allow! First of all, you will have a trustworthy factory to work with and you will be entitled to more discounts as the factory gets more orders from you!
For other advice on building a factory network, feel free to come to ODM!