In today’s busy business world, outsourcing is still in vogue, and China Outsourcing & Manufacturing in particular. At present, China’s outsourcing market is still growing at around 20% – 30%, year on year, even with increasing costs, and this market still creates good opportunities for manufacturing new and existing products as well as innovations, and more recently, product development.
Previously, UK companies benefited from high volume products being produced at low cost, with sometimes also low quality. In recent times, this has changed, and now more UK companies are moving new products to China, utilising the benefits of highly technical personnel, english speaking, with the benefit of Chinese companies having new machines and equipment in the development of their product. There are still opportunities to maintain reduced costs, which on new products allows big cost advantages at their market introduction.
When considering China Outsourcing & Manufacturing, the company needs to fully understand the product they are looking to outsource and the pros and cons of outsourcing. Without a good understanding of China Outsourcing, then you may not succeed.
Some things to know about China Outsourcing are listed below:
- China Outsourcing is not for every company. To go down this route, companies need to fully understand their industry and business model.
- China Outsourcing demands a lot of changes and normally requires dedicated resources to make it a success. This is where Source in Asia can help UK Companies in the resources required. Communication methods are different to European methods, especially with the language, and therefore companies may need specialist translators.
- Manufacturing contracts need to be agreed with your Chinese Partners, especially the legal requirements.
- Work out an Outsourcing strategy that is best for your company, and not go the whole hog and outsource everything, as this will be doomed to failure. China Outsourcing & Manufacturing must be taken seriously and companies need to take time in their decision making.
- Choose your suppliers, visit them, build up a relationship with them, carry out audits and fully understand what a supplier is going to provide. Never Assume. IF YOUR COMPANY REQUIRE HELP IN DOING THIS, CONTACT SOURCE IN ASIA LIMITED, who can offer independent advice to a company.
- If a company is simply looking at cutting costs, then China Outsourcing is not for you.
- Costs are also a key item in the Outsourcing decision. Investing money in a strategy up front will generate savings later. When obtaining costs from suppliers, obtain detailed cost breakdowns, and ensure that at a later date your are not going to incur extra’s not budgeted for.
- Be aware, you never get the best cost.
- Also be aware of the payment terms when dealing with a Chinese Supplier. For production parts, it is normally 50% deposit and 50% prior to shipment, so you have paid for the parts before you see them, and if you have not visited the supplier to inspect the parts, then potentially, the first time you see them as rejects is when they arrive at your factory. Not good for you or your customer.
If managed properly, China Outsourcing can give you a large increase in your investment, but if not managed properly, can be a large drain on money and resources.