A few years back most marketing managers used to travel from Europe, North America, and Japan to find markets in China to sell their products. Now the scene has totally changed. These days, procurement managers from all those countries visit China to buy Chinese products.
Leading Western and Japanese companies now are more eager to source certain Chinese parts and products for their developed markets rather than selling their own products in the huge market in China.
China has rapidly emerged as a manufacturing hub for low-cost products whether it is any consumable products or industrial products. All the retailing giants of the western countries are now coming to China to source their products to sell.
Leading automakers of the world are now trying to open their operations in China or quite a few are trying to source various components and auto parts from China.
Although there are many hassles in importing goods from China, some of them are:
- China is one of the far east Asian countries almost at the opposite end of the globe
- Very few people in China can speak good English and hence communication with them is a big issue
- The business culture is entirely different from Western countries
- Perception of the “Made in China” tag still remains a question mark on quality
- It is impossible to deal with any Chinese company without taking the help of a sourcing agent
- Finding a trustworthy and reliable sourcing agent in China is also not very easy.
Let us, therefore, discuss in this article a proven sourcing process that one should develop while deciding to source any products from China.
1. First assess the ability of the supplier to communicate
Besides looking for suppliers that can offer the right product and of the right quality, the first and foremost thing to check is their ability to communicate.
In fact, you may suffer a big loss just because of poor communication between you and your suppliers in China. Check the following:
- How quickly do they reply to your email?
- How much attention do they pay to various details?
- How clearly the supplier responds?
One cultural difference you will find while working with Chinese suppliers is the tendency to make their own assumptions if there is an absence of information. If you can identify any such issues with your Chinese suppliers then better avoid such suppliers.
However, while sourcing from China, you can save time and also prevent mistakes by first ensuring that your suppliers can communicate effectively.
2. Ask for product samples first from the factory
Requesting your product samples will be essential to narrow down your potential suppliers among the larger list. By asking for a sample, you can properly evaluate whether the supplier can deliver you the right product with the right quality.
Any reputable suppliers will not mind sending a product sample if you show interest in their products.
You can examine every element of the product, including the components and materials used, the product’s measurements, and the supplier’s attention to minute details by requesting a sample.
When the quality of the materials is crucial, carry out lab tests for material composition and comparisons against samples from various vendors.
It happens frequently that a supplier will provide a product sample that was not actually made in their plant. You can assess whether a provider can uphold the quality it set with its initial sample with a smaller, test order.
3. Audit the supplier’s facility
Finding the ideal supplier involves visiting the factory and conducting an audit. You could always decide to visit the factory all by yourself. However, most of the importers prefer to send internal or outside experts for carrying out a detailed examination.
A quality management system audit will include the following:
- Maintenance of basic facilities
- Production equipment
- Production environment
- Operational procedures and record keeping
- Materials control
- During-production control
- Finished goods control
- Lab testing
- Engineering and design
- HR recruitment and training
- Business development and management
A few other types of factory audits may also be done on the following:
Social compliance audit like –
- Workplace safety
- Labour practices wages
- Social benefits
- Good manufacturing practices
An audit conducted prior to starting manufacturing is very helpful in assessing a possible supplier. Audits can do more than just find possible issues in a factory. They may also assist you in selecting the ideal supplier to start your China sourcing.
4. Set clear expectations for your product requirements
As soon as you get in touch with a potential supplier, try to set your expectations. However, now that you have probably selected a supplier, there are several methods you should keep doing throughout your sourcing process.
Show the following requirements in your QC checklist:
- Product dimensions
- Any Pantone codes for colour specifications
- Packaging requirements
- Any on-site testing needed during the inspection
- Any equipment required for inspection
- Who should provide the equipment
Another chance to specify additional needs is through the purchase order. Effective POs include:
- Specifics on the product
- Ex-factory date
- Basic supplier information
- Payment conditions.
Setting clear expectations is essential to prevent misunderstandings that frequently result in issues.
5. Conduct product inspection
Checking the quality of the products before they are shipped is the final step in sourcing from China. Visiting the factory personally and inspecting will only be reliable methods to ascertain the quality or status of your order.
A product can typically be inspected by an importer at several phases of manufacture including:
- Pre-production inspection
- During production inspection.
- Final inspection
- Post packing inspection
Some importers will mostly rely on the supplier’s own QC employees to inspect the goods before it ships, especially those who are new to buying from China. However, the following steps can also be followed:
- Hiring full-time inspection staff
- Appoint a sourcing agent to inspect
- Third-party inspection
Most importers can benefit by taking either of the above ways.
There could always be unexpected problems while working with a new source. It is almost impossible to forecast every possible problem. Whether you are sourcing from China or somewhere else, this is true. By heeding the above guidelines, however, you can protect your clients, your investment, and also yourself.
You are guaranteed to have a better experience if you exercise due diligence at every stage, from choosing a provider to defining expectations and ensuring your supplier is able to fulfil them.