Procurement in China – Buyer Diary #18 Complicated Products

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 the manufacturing problems faced. This is one of a series of blogs that we will title: Buyer Diary.

What defines a complicated product?

A complicated product can refer to one with many different accessories or having many production steps. A fine example would be a magic set. A magic set itself has tons of different magic props, each having its own manufacturing code.

Procurement in China - Buyer Diary #18 Complicated Products

Procurement in China – Buyer Diary #18 Complicated Products

Handling Procurement of Complicated Products

Trust us on this – things can get really complicated in China. There are many factors to take note of during procurement, as mentioned in the previous serial post. In addition, this entry explains important factors when handling complicated products.

Higher Percentage of Faulty Goods

The more complicated a product is, the higher the percentage of faulty goods manufactured will be. Not all the defects will be the same. Let’s just put it this way: there are 2 faulty magic sets spotted during the quality check. One of the set has defects on accessory X and another on accessory Y. Defects on accessory X was caused by an error in the step 2 of the production, while defects on accessory Y was caused by an error in the step 4.

The more complicated each accessory is, and the more accessories we have, there will be a higher percentage of faulty goods as both of the magic sets spotted earlier will be rejected for their various errors.

Of course we can replace all the faulty accessories, instead of having to reject the entire set during procurement, however, that requires more resources. Again and again, the ideal solution is to arrange for a quality control test from an external professional party.

Longer Manufacturing Lead-time

Generally it takes about a month or two to manufacture a few thousand pieces of a complex product. Not to mention having to manufacture many different products. We will have to ensure that all accessories are manufactured before assembling can continue. This definitely takes up a longer manufacturing time.

To curb this issue, we can deploy the following measures; however do take note that each has its considerations and drawbacks.

Higher Cost Involved

Because of the complex production process, factories are likely to charge more for a safety net, as they always say – “just in case”. As pointed out in previous buyer diary entries, anything and everything can go wrong during procurement in China. Because of this, factories are charging more in order to rectify and solve problems when they arise. Especially so for complicated products.

Higher percentage of faulty goods and longer manufacturing lead time also leads into higher cost, as we need to solve these problems.

Multiple Factories Involved

As mentioned earlier, we can delegate the order to avoid long manufacturing lead-time. This factor is a concern during procurement . Take for example we delegate each accessory to different factories. That might mean handling as many as ten different factories for one order.

“It’s no longer chess, it’s dominos.” they say.

One factory makes a mistake, and it affects the entire production. It could lead into disastrous results if not handled carefully. A domino effect can happen in any of the following issues –

  • Production Schedule

Take for example, if Factory A has a lag in production schedule because of a power failure at the factory, all the other factories will have to wait for its completion before assembling the goods.

  • Delivery Schedule

Any factory which is late for delivery, it affects the delivery schedule for the goods, which equates to a breach of contract with the ultimate client.

  • Manufacturing Problems

As long as there are manufacturing problems detected at any of the factories, the estimated ready time will be delayed.

  • Quality and Quantity

It is important for all factories to hold a consistent quality of the goods. Any slack will result to a classification effect as these goods are of ‘poor quality’, therefore tarnishing client’s reputation.

  • Assembling

With so many factories involved, the question is: where and when to assemble and on who’s budget?

  • Transport

Transporting the accessories from factory to factory for assembling requires manpower, time and cost. Who takes up this responsibility – the receiver or the senders?

  • Political Problems

When we have many parties involved for an order, which factory is taking the lead? And of course which factory is to bear the responsibility when problems arise?

As you can see, we face different problems during procurement in China. It is best to go to professionals to seek advice whenever necessary, especially when managing factories are not your forte.

2018-03-02T16:02:20+00:00