Posts Tagged ‘Contract Manufacturer’
5 Reasons New Product Development Fails in China
New product development is not an easy task, especially for those without experience in dealing with overseas new product development and manufacturing.
It may seem trivial at first if one of these unfortunate events takes place, such as months of delay, high defective rates, increased cost overruns that don’t match initial planning and other obstacles that come up at the last minute which could lead to disastrous results if they’re not dealt with quickly and efficiently enough.
In this article, we’ll explore what can go wrong with new product development in China and how you can prevent your costly mistakes from occurring.
1. Expectations Don’t Match the Reality
The first hurdle for the new product development process in China is your expectations don’t meet reality.
Product development and manufacturing in China are complicated processes so understanding what to expect from these processes beforehand can help manage your expectations correctly.
It’s important to work with an experienced Chinese Product Development Company that can offer reasonable estimates for the costs and timelines of your project so that you are prepared before production begins. If not dealt with properly, it becomes easy to make mistakes such as ordering too many products or neglecting orders altogether – leading to either excess inventory at hand or no merchandise available at all.
2. Communication Breakdown
A major factor in product development failure is a communication breakdown between you and your new product development supplier.
If you don’t provide enough information about what you need or don’t understand what the supplier is telling them, problems will inevitably arise.
The lack of communication can lead to additional delays and costly mistakes being made. There are three main ways that communication breaks down during the new product development process.
Firstly, if you don’t know how to articulate your requirements and standards, your supplier won’t be able to effectively manufacture your products.
Secondly, some overseas clients often don’t know how to accurately interpret feedback from their suppliers and vice versa, which could end up in poor product quality
Thirdly, it could be that there is no clear understanding of who has the final say when making key decisions about the project at hand. In these cases, product manufacturing problems tend to come out later, as changes cannot be made quickly enough.
To avoid these types of problems, careful translation is necessary and frequent communication should take place between you and your supplier to ensure understanding. Also, both parties should be responsible for taking swift action to figure out what went wrong with the failed process before other problems arise. Communication should be frequent and thorough to prevent potential misunderstandings before they become problematic.
3. Design Issues
Designers may make mistakes during the process of designing a new product, or the manufacturing company in China may misinterpret the design specifications.
For example, if you’ve designed a toy that is supposed to be round, but the manufacturer misinterprets this as a square and cuts it on its side instead of top to bottom, it will not turn out as desired.
There are also language barriers that can lead to issues with the design. Many terms for a round do not refer to the same object (circular, spherical), which can confuse. The phrase “I want two circles one centimeter apart” could be translated as “two semicircles or two full circles”, depending on what terminology is being used.
If a design cannot be executed as planned, it is important to have a contingency plan. It is important to know when to cut your losses and redesign the product rather than pushing ahead with something that won’t work.
4. Poor Quality Control Processes
Poor quality control processes can result in many serious problems in the new product development process, making it more difficult to your production deadlines, resulting in canceled orders, and negative reviews of your product.
Defective products may also lead to higher customer returns due to units that have not been properly inspected before they are shipped. All these will negatively impact your business’s bottom line and reputation.
So, quality inspection should be done with special attention to prevent the inclusion of defective or non-conforming goods in shipments. Of course, getting product quality right from the start and ensuring it meets your expectations and standards will save time, money, and frustrations later.
5. Wrong Product Development Supplier for your project
Suppliers of product development services will vary in terms of costs, scales, qualities, expertise, and capabilities. It is important to determine these factors when selecting a China-based supplier for product development needs.
If you are in search of an experienced manufacturer for electronic goods when your supplier only specializes in the manufacture of home appliances, then it would be wise not to work with them due to a lack of capacity which will ultimately lead to delay or cost overruns.
Many factors contribute to product development failure in China, some of which can be controlled and some that are completely out of your control. You need to understand these factors so you can better manage them and hopefully prevent them from happening again in the future.
If you’re seeking a company to fill all your new product development needs, look no further than Shield Works. We are a British-owned and managed company specializing in providing dependable product development and precision manufacturing services. We take pride in creating quality products with consistent processes to guarantee both quality and consistency every time, so you never have to worry about anything going wrong during this process. Start your journey by reaching out today for more information and see how we can make sure that the process goes smoothly.
5 Things about Outsourced Product Assembly You Can’t Afford To Miss
If you’re looking for ways to save time and money, outsourcing your product assembly could be one way to do that without compromising your overall quality. Here are some things you can’t afford to miss if you’re considering this option. These tips apply whether you’re looking at outsourcing on a small or large scale; the only difference will be in the amount of detail each section of your post needs. With that in mind, here are the five things you can’t afford to miss if you’re planning to outsource product assembly.
First off, What Is Outsourced Product Assembly?
What is outsourced product assembly? How does it differ from in-house assembly?
When a business outsources assembly, it hires a third-party company to make the items it uses or sells in part or in full, depending on the relationship established between the two parties.
Whenever you consider outsourcing your product construction, think about the items that you would like to have made, then find businesses that can build them, and then talk to them about forming a relationship.
It’s important to know exactly what you want a third party to do for you before you begin outsourcing.
It Lowers Your Costs
Doesn’t it make more sense for companies to produce everything themselves rather than outsource it?
The cost of running a business increases when a company creates its own products. It can especially hurt small companies, since they may lack the funds to hire many workers.
Your production costs can be reduced by partnering with another company. When you do this, the other company will provide and employ the workers for you. Thus, you do not need to pay salaries or hire new employees.
Other companies are usually based overseas, such as in China. China’s manufacturing costs are cheaper than in other developed nations, so you will not have to spend as much on your final product. As a result, you are able to cultivate productive and positive business relationships with professionals abroad!
You Can’t Just Work with Any Product Assembly Company
Just as with any business partnership, you want to make sure you find the right manufacturing company for your specific requirements.
Make a list of all the materials and items your product requires. Does the company have them?
Also, ask them if they have worked with any companies similar to yours in the past.
Furthermore, you should pay attention to how friendly and professional the company’s workers are. In order to be productive for as long as possible, you should look for a company with great client service.
If their customer service is not up to par, then it will be difficult for them to get things done efficiently.
In addition, you need to know what type of warranty is offered by the manufacturer so that when problems arise, it can quickly be resolved without too much stress on your end.
Furthermore, price is also important when choosing a product assembly company.
Timeline Is Important
When you first talk to a company, ask them how long it takes them to produce and ship items. This will affect how quickly you can deliver materials to your clients. Therefore, you should find a company that makes high-quality items quickly.
You should discuss what happens when unforeseen circumstances occur. Natural disasters, for example, might cause the company’s ability to deliver your product to you to be interrupted. In times of emergency, you should know what measures the company takes to keep its production running smoothly.
If an urgent situation arises, ask who you should contact. This will give you a person to go to, instead of wasting time looking up who to contact.
The last thing you want is to miss deadlines because of miscommunication. Lastly, make sure that both parties have contingency plans in place in case any problems arise.
Make Sure They Have Everything It Needs to Protect Your IP
Copyright is different depending on which country you are in, so a company should do what it can to ensure that its intellectual property is safeguarded.
That’s why you should research the intellectual property laws of the country in which your products will be made. If they do not protect the rights of other companies, consider making your products elsewhere.
As a bonus, you might also be able to use this to assess the company’s technological competency in keeping your data safe. Do they use leading-edge, state-of-the-art software? Is it comparable to the security you take at your place of business? Do they make regular security checks and upgrades?
A leak of your intellectual property can result in serious, business-damaging losses such as intellectual property piracy and lost data. If you’re trying to keep your company safe, think about the level of security that others have.
When you find a potential supplier that meets these standards, take things a step further. Ask them how they will keep your data and IP safe. Do they have a physical security system? Will they test regularly to make sure everything is working as it should be? If so, then you can work with them more confidently.
Also, you can take precautions on your end. Always have NDAs prepared for your supplier to sign before giving out any sensitive information; register trademarks and patents to prevent copycats and protect your brand; if you source parts or components from multiple suppliers, assemble them at one secure location;
Ready to Outsource Your Product Manufacturing?
In light of this, have you given thought to outsource assembly process?
Outsourcing production may help a company get their goods faster and more cheaply than trying to produce everything on-site. Further, they are freed to focus on innovation and growth of their company.
Here at Shield Works, we manufacture goods. Located in China and British-owned and managed, our goal is to provide clients with high-quality items at affordable prices. If you would like to know more about what we can offer, please get in contact with us!
Contract Manufacturing in China: How to Get Started
China manufacturing. It is one of the most well-known industries in the country, and it has a strong global presence.
It is known as a leader in the manufacturing industry because China commands 28% of the global manufacturing industry. For perspective, the United States is second place on that list at just over 16%.
With the country having such a strong manufacturing presence, you may be tempted to do business over there. If you have this interest, you have to look into contract manufacturers.
What do you need to know about contract manufacturing? What do you need to get started?
This is your guide.
Remember Your Intellectual Property
You have to remember that when you are doing business in China, there are different intellectual property laws than in your home country. If you are coming from the United States, you need to be aware that there is much less protection for intellectual property in China than there is back home.
So, if you have a product where success relies on you being the exclusive provider of it, you need to do your homework about intellectual property laws in China before drawing up a contract. Make sure you go through all of the proper channels and have all of the paperwork to protect your intellectual property as much as possible there.
Set Quality Requirements
The next thing that you have to do is make sure you set up quality requirements in your contract. This can help protect you from a business that may not be known to operate with the highest standards.
Putting your standards and requirements in writing strengthens your position and gives you a higher chance of getting quality results. The reason for this is with having this in writing; you have something to fall back on if something goes wrong along the way.
Whereas if the lack of quality comes up unexpectedly, you may be stuck dealing with it if you signed the wrong type of contract with this company. Make sure you spell this out and figure out what quality requirements you want before agreeing to do business with a company.
Be Very Detailed
When it comes to contracts, in general, you want to have as many details listed as possible. Manufacturing in China is no different.
A contract helps make clear what your standards are, what your expectations are, and what you are expecting a manufacturer to provide. For example, if you have a quota for how many items need to be shipped every week for one product, you should put that in your contract.
What standards need to be put in place? How much money are you going to pay the manufacturer? How are you determining that price? What is the size and color of the product requirement?
These are things that you need to think about in terms of details in a contract. You may also want to consider how long you want this contract to last and if you want to be exclusive with this manufacturer.
If you do, then that can have an influence on what the contract terms are and how much you are going to agree to give a manufacturer.
Go Over Pricing
Along with the above, you need to go over the pricing and payment procedures with your manufacturer. It is a detail of the contract, but it is arguably the most important detail.
The reason is that having the pricing and payment structures laid out could be the difference as to whether your business survives or not. This is because if there is a misunderstanding, you may not have the funds to pay for litigation or even to pay what you owe.
Go over this carefully and make sure you understand exactly how much you have to pay and what exactly you are getting in return for this payment.
Prepare for Disputes
Going off of the above, the best way to put out a potential fire is to prepare for one that might come up. This includes disputes because it is likely that you may have at least a minor one with the manufacturer that you choose to do business with.
Try not to worry too much because this is a normal thing to go through. About 85% of people in business experience a conflict at one point or another.
The best way that you can handle this is to prepare for the worst and hope for the best. Essentially, be aware of any possible problems in the future and come up with plans to resolve them.
Find a Reliable Manufacturer
Finally, you are going to need to have a reliable manufacturer by your side. It is best to have someone that has a good reputation in the industry and someone that has taken good care of colleagues. If you do not know anybody like this, perhaps check reviews and testimonials.
Having a good manufacturer can save you time and money, along with any potential business headaches in the future.
Get Started With Contract Manufacturing
These are some of the key things that you need to know when it comes to contract manufacturing. Two of the most important things that you need to make clear are the pricing and payment of services, along with the quality you expect. In general, it is best to have all details covered with a reliable manufacturer.
Are you ready to get started? Message us today to take the leap.
OEM 101: Everything You Need to Know About Original Equipment Manufacturing in China
For years, China has been the best go-to manufacturing location around the world. Countless overseas companies choose to outsource their production to China for different types of products with lower costs and higher quality. But do you know much about an original equipment manufacturer (OEM) or why they’re so important? If not, it’s time to learn more.
Whether your business is selling a product directly to consumers or through retailers that make their products, learning about OEMs will give you a better understanding of how business works and how you can improve your bottom line. So, sit back and read this article on OEMs and how they work, then you’ll have all the knowledge you need to become successful in your field.
What is an Original Equipment Manufacturer (OEM)?
An original equipment manufacturer (OEM) is a manufacturing company that creates component products for other retailers to build finished items like a computer, phone, or car.
The company that makes the initial component products is called an original equipment manufacturer (OEM) while the company that buys those component products from an OEM is called a value-added reseller (VAR) because they add value to the original item by combining multiple parts together to create final finished items with more features.
The term OEM is most used in the automobile and computer industries. In the case of automobiles, the company that creates car parts is OEM and then sells those original pieces to another company that assembles them into cars for retail sale.
What is the Difference Between OEM and ODM?
ODM, an abbreviation for Original Design Manufacturer, is also referred to as private labeling.
For both OEM and ODM companies, many similarities make them comparable. However, they also have some key differences when it comes to unique flexibility and customization options for overseas clients.
When an overseas business has an original idea for both product design and product functionality, it’s worth looking into the use of an OEM to produce these goods at a lower price point while maintaining high-quality standards. And best of all, they can change their products according to the latest trends and innovations to suit the needs of consumers because they have exclusive IP rights over the products. This way, they don’t have to build out their engineering team or manufacturing plant. Instead, they just need to find an experienced OEM with a team of experts to take care of their production while they focus on marketing and running other aspects of the company. OEM is an ideal option for foreign companies that own their intellectual property rights and are looking to lessen production costs by outsourcing overseas.
ODM is a cost-effective option for importers who want to take advantage of the pre-existing product designs in the manufacturer’s catalogs. Importers are only allowed to make minor changes with the help of an ODM designer when selecting the certain products they would like to import and resell under their brand name. These changes may include color, size, and certain tweaks of components or functionality – all within limits set by the ODM. In this case, an ODM makes it possible for any overseas company to get products to market without having a huge investment in in-house design and manufacturing. ODM is suitable for startups and small businesses that don’t want to maintain a significant amount of inventory for themselves. Also, established businesses use ODM to make some promotional products with their logos to attract new customers.
How To Choose an OEM in China?
Now, you may have a better understanding of OEM. If you want to learn how to choose a reliable OEM partner for your project, keep reading on.
1. Know Your Expectations and Needs
First and foremost, if you want to complete your production successfully, you should clearly know what you want from your OEM supplier.
For example,
- What’s your product type?
- What are your quality standards?
- Do you need your OEM to deal with design and prototype or just manufacturing?
All these questions should be taken into consideration before diving into the world of original equipment manufacturing.
2. The Tradeoffs of Costs and Quality
There are always tradeoffs when it comes to making a choice. Costs and quality are two of the important things that are traded off in OEM manufacturing. This means that there will always be an opportunity cost for each decision made.
You have to understand that the overall costs go up because you have to pay for better raw materials, techniques, and skilled labor. If you don’t have enough budget, the quality of your product might suffer too much.
Therefore, when working with an OEM to make your products, it’s important to consider the tradeoffs between the overall costs and product quality.
3. Ensure Your IP Rights Are Protected
Your IP rights are the most valuable aspect of your brand and business. Your IP rights are all of the work that you’ve created and they’re what set you apart from everyone else.
So, you can’t take any risks when picking out a Chinese OEM supplier. With so many manufacturers here in China nowadays, it’s always best to double-check whether or not your manufacturer of choice has had anything stolen from them in the past. It’s also wise to sign an NNN agreement before agreeing upon cooperation and make sure everything is legal if transferring your design or idea over to them.
Work With a British-Owned OEM Supplier in China
Any time you outsource manufacturing factory selection is very important. When you move your manufacturing to China, you may feel overwhelmed by the choices and worry about the legitimacy of the operation.
As your OEM manufacturing service provider in China, Shield Work Precision Manufacturing can meet your production needs. We offer a forward-thinking approach with the ability to fully customize work procedures, equipment and develop new specialist in-house manufacturing processes.
At Shield Works, we have a proactive approach to manufacturing and are always keen to explore new specialist processes. We are one of the leading original equipment manufacturers and have been providing our services since 2005. Contact us today to discuss your requirements.
Supply Chain Management: The Backbone of Your Business
Supply chain management is the backbone of any company, big or small, that deals in physical goods with substantial production and distribution processes. When you’re starting out your business, supply chain management might seem like an afterthought; you’re more concerned with what goes on inside your company than the goods that come in and out of it. But when you’re ready to scale up, you’ll need a way to manage your goods from their point of origin all the way to where they’re being used—and that’s where supply chain management comes into play.
What Is A Supply Chain?
A supply chain is the network of all suppliers and producers, distributors, warehouses, and end customers involved in producing and delivering a product. Supply chains are found in a variety of industries including automobile manufacturing.
A consumer goods business’s supply chain can be broken down into four main categories: supplier development and management; distribution; operations management; and customer service. These four components work together to ensure that goods are delivered to customers on time while maintaining a high level quality.
Suppliers need to be monitored for quantity, delivery times, and any changes in price or availability. Distribution requires coordination with carriers and transportation services for getting products from point A to point B without any delays or damage. Operations must handle such things as plant floor layout, storage equipment design, assembly line design, production scheduling strategies and inventory levels. Customer service involves managing customer expectations with respect to pricing/costs, lead times and order fulfilment.
An effective supply chain is crucial because it ensures your company has continuous supplies which allows you to stay competitive by meeting your customers’ needs at a low cost while still ensuring profit margins remain healthy enough for long-term success.
Benefits Of Having A Good Supply Chain In Place
A good supply chain will ensure the availability of your products and services to buyers. Having a reliable supply chain in place means you can trust that what is promised is delivered, without worries about product shortages or delivery delays. It also means you can focus on other aspects of your business, such as marketing and customer service, knowing that your supply chain is running smoothly. Good inventory management also saves you money by reducing the amount of time spent managing inventories; it eliminates waste by reducing excess production; and it prevents overbuying or underbuying by estimating demand more accurately.
It also allows you to offer same-day shipping or delivery services, which can greatly improve your customer experience while enhancing your brand image in shoppers’ eyes. Finally, having control of every step of the process from production to distribution gives you peace of mind because you know where your products are at all times.
Problems With A Poorly Planned And Managed Supply Chain
A poorly planned and managed supply chain can lead to a variety of problems. For example, if your supplies are delivered late or in the wrong quantities, it will be difficult for you to keep up with demand and meet customer expectations. This could cause your customers to look elsewhere for products, meaning you’ll lose money. Similarly, if something goes wrong with a shipment – say you ordered 2,000 units but only received 1,500 – then you won’t have enough product on hand to fulfill orders and may have to cancel some orders altogether. This can damage your reputation as well as cause delays in production that hurt your bottom line.
In addition, a poorly planned and managed supply chain can lead to even financial problems. If your supplier ships you faulty products – say they accidentally send you 2,000 units that don’t work properly – then it may be difficult for you to get a refund or replacements. This could force you to halt production as your staff tries to identify and replace all of these faulty units and seek compensation for losses. Worse still, if there’s an issue with your suppliers’ products that leads to serious injuries or health complications for customers, then it may be difficult for you to find a lawyer who will take up your case due to consumer protections laws in many countries. And it’ll be detrimental to your cash flow.
How Can You Effectively Manage An Effective Supply Chain?
There are many factors to consider when it comes to supply chain management, but the most important is having a plan. You should start by writing down all the points that are essential to your business and then create a list of what you need for each point. You can also make use of a system that will help you manage your inventory and keep track of where things are in the process. When it comes to order fulfillment, be sure that you have enough space in your warehouse or storage area to account for the time it will take for customers’ orders to arrive. If you’re not sure how much space you’ll need, speak with a professional who deals with these matters on a daily basis.
Or you can hire a professional supply chain management company. They will work closely with you to establish goals for your organization’s future manufacturing plans as well as strategies that address potential problems like an increase in problems or changes in technology. They also provide recommendations and support for establishing a sustainable supply chain strategy. With their guidance, there’s no doubt about it: You’ll be able to continue running an effective supply chain without wasting money, resources, or time.
Shield Works Can Take Care of It All
Shield Works has over 17 years of experience in managing supply chain, all the way from manufacturing to delivery. We can help you achieve your goals and objectives while saving time and money. For a free consultation on how we can help your business, call today!
Why China is the Top Country for Product Prototyping
Although there are prototyping services in numerous countries around the world, China provides one-of-a-kind advantages to entrepreneurs and manufacturers alike. Let’s take a look at why China is the best place to prototype products before they launch globally.
Labor cost is lower
While labor costs in China are still cheaper than those of other high-tech economies like Japan and South Korea, they use more advanced machinery and better manufacturing processes to make products cheaper, faster, and higher in quality. Allowing these firms to set lower prices, such efficiency come from better use of technology (like robots) and closer monitoring of labor schedules to minimize downtime (i.e. breaks taken by workers). These different factors increased efficiency and lower wages, which mean that Chinese manufacturers are capable of supplying a higher quantity of products at a lower cost than anywhere else in the world.
They take care of it all
Some Chinese prototyping shops provide all the help you need to build a prototype. On-staff designers, 3D printers, and injection molders will give your ideas form and shape. if you purchase a package deal, they’ll do all of your work for you. Startup founders love this because it lets them focus on what they do best. Even better: specialized prototyping companies are popping up in increasing numbers, with faster-than-normal manufacturing processes, which work well for small startups aiming to get specific things accomplished.
For example, if you’re building a medical device, you might want to partner with a firm that specializes in the design and manufacture of medical devices. These firms know the details that the regulatory agencies such as FDA need to make sure that you’re following their protocols and as such you don’t need to concern yourselves with that information. Entrepreneurs who are launching hardware-based products should work closely with these experts from the earliest phases of the project.
Fast delivery
Inexpensive prototyping and large-scale manufacturing allow product developers to innovate at an unprecedented pace. Chinese factories offer lower costs, shorter lead times, and larger production volumes than other countries. Companies like Apple have established relationships with Chinese manufacturers for over a decade. Today, a large percentage of Apple’s products are manufactured in China—including final assembly for some parts (e.g., cables and batteries). While there are many factors that come into play when deciding where to locate production, high speed of prototype delivery has become increasingly important as consumers demand better turnaround times on pre-orders.
Preloaded technology
Since they make 3D printers with helpful software to make them easier to use, Chinese manufacturers also preload their 3D engineers with more industry experience, because they typically hire skilled workers who are experienced with manufacturing similar products or work with experienced consultants. Due to its large population, the talent pool in China is nothing comparable to those in other countries. It’s been difficult to close this sizable gap.
Innovative culture
While in the past China’s reputation has been that of a country that has stolen technologies and has relied on a copier culture, it’s now on the verge of becoming a leading economic power. Beijing’s top leaders are beginning to think that innovation, not imitation, can be the solution to some of the country’s problems and that it can create new industries and jobs, as well. They believe that innovation will lead to economic growth and more opportunities. nearly 700 universities in China have revamped their names to incorporate innovation, signifying an emphasis on teaching for research and development. Only a few years ago, these schools focused solely on providing the lowest common denominator of engineering training, churning out manufactured products for countries around the world.
Home-made tech forces
One of the reasons why Chinese startups can prototype at such an accelerated rate is that they take advantage of local tech hubs. These facilities allow startups to rent office space, equipment, and more–eliminating expensive overhead costs while also fostering a sense of community and support. For a tech startup’s success in prototyping its product, being closer to industry experts and resources as well as proximity to large financial markets might be just as important as proximity to Silicon Valley’s startups and innovation.
For instance, take Huaqiangbei in Shenzhen for prototyping needs. With processors, motors, sensors, and circuit boards, this massive market has all of the electronic components imaginable. This place would be like a godsend for an entrepreneur! Don’t worry, those needing a startup engineer or product designer needn’t walk the thin line of distributors or manufacturers – they can take to the equally harrowing but far shorter task of searching Huaqiangbei Street instead! Of course, they also gain an attractive other benefit, though access to information.
Shield Works’ in-house engineering team is well-seasoned and bilingual, and we have over 17 years of product prototyping experience in China. Contact us now for more!
What Are the Benefits of Contract Manufacturing in China?
Over $540 billion worth of goods were imported into the United States from China in 2021.
China has been and remains the manufacturing hub of the world for the last few decades. This growth allowed China to invest in infrastructure to further its dominance in the sector. These investments have made China the perfect one-stop shop for the world’s manufacturing needs.
Contract manufacturing in China offers a wide range of benefits to businesses of all sizes. Outsourcing production in this way can help lower your costs and set yourself up for expansion throughout Europe and the rest of the world.
Interested in moving your manufacturing needs overseas? Here are a few of the major benefits of contract manufacturing in China.
Lower Production Costs
China is home to over 1.4 billion people. These population numbers have created a labor market where wages have remained low compared to other markets in the world. The minimum wage varies in different regions, but the average is still below $3 an hour.
The lower cost of labor directly decreases the overall cost of production as companies can afford to hire more people with the same budget. The ability to hire more people makes the entire process more productive. This increase in productivity means that every unit produced ends up being cheaper.
Fewer Regulations
The manufacturing sector in the United States is heavily regulated. Red tape and production regulations can delay internal processes and even halt production. This can have a massive financial impact on the company.
This is why many outsource their manufacturing to China as there are far fewer regulations to navigate. While there are still strict health and safety regulations in place, everything is designed to be as efficient as possible. This allows businesses to instantly start production and distribution.
Excellent Logistics and Shipping Services
China has dominated the manufacturing industry for a seriously long time. This industry has grown to contribute around $4 trillion to the national GDP every year. However, these finances were invested to make the country the manufacturing hub of the world.
China has invested in strategic infrastructure to help make logistics as efficient as possible. They have done this by upgrading their shipping ports, airports, and national highways. China has also invested heavily in international highways to help deliver goods throughout Asia and some parts of Europe by road.
This, along with its geographical location, makes it the perfect place for contract manufacturers.
Central Location
China may not be as central as Europe, but it’s close enough to its largest trading partner, the United States. This allows American companies to sign contract manufacturing agreements with local companies online.
Modern technology has helped make this process as easy as possible. There are even online platforms designed to help businesses find local manufacturers. However, there are also experienced firms that offer guidance every step of the way.
Productive Business Culture
Contract manufacturing agreements are designed to be as efficient as possible. This is because outsourcing your manufacturing helps reduce the risk of production for your business. While there may be other options available, the Chinese market is by far the best choice.
This is because the manufacturing industry has world-class infrastructure, local support, and experience. The industry is designed around efficiency and comes with a productive business culture to match. This productivity can help you lower your overall production cost to boost your profits.
Saving you time, making you money.
Global Expansion
As mentioned above, China has the best logistics networks in the world. This allows the local supply chain to operate with accuracy locally and internationally. This is because China is already linked with almost every country in the world.
In this way, outsourcing your production to China gives you access to the country’s logistic network around the world. This makes it easy for you to produce goods in China and ship them directly from China to various countries. Shipping directly from the factory to the destination can save you money.
China has trade agreements and deep diplomatic relations with almost every country in the world. This means that you can leverage the country’s existing infrastructure to grow your business around the world.
Attractive Local Currency
The Chinese currency is one of the country’s most powerful tools. This currency is not exchanged like other currencies in the world as it’s completely under the control of the local government.
This means that the government has the ability to create a stable economic environment for investors. By controlling the currency, the government can use it as a tool to encourage investment whenever it’s needed.
The local currency is kept at an attractive rate for foreign investors. This helps keep local costs down for international companies. By making every dollar go further in China, it encourages businesses around the world to move their operations to the country.
Contract Manufacturing in China
China is the manufacturing hub of the world for a reason. While businesses around the world may have seen China as cheap labor in the past, the country has evolved. This has resulted in a productive business culture that can help serve businesses around the world.
Whether you’re a small business looking to cut down production costs or a company trying to expand, contract manufacturing is the way to go.
Interested in outsourcing your manufacturing with a contract manufacturer in China? Contact us for more information. Our experienced team is ready to help.
Contract Manufacturing in China: Common Issues and Tips to Avoid Confusion
You’ve probably heard about contract manufacturing in China and have wondered if it’s the right choice for your business.
To help you make an informed decision, we’ve put together this guide on some common contract manufacturing mistakes in China, so you can avoid confusion and issues with your Chinese manufacturers and create a strong partnership that benefits both parties involved. Let’s jump right in!
1. Not Understanding the Contract Manufacturing Process
Outsourcing contract manufacturing to China provides many benefits, but it does come with some risks for those who don’t know what they’re doing. Several issues commonly arise when outsourcing to China so make sure you’re aware of them before taking on this task.
One of the major issues that will hurt your business is not knowing the production process from the beginning. You should know what exactly you will be getting in return before going ahead with your work.
Before working with a contract manufacturing company in China, you need to decide what will you want them to take care of for you, for example:
- What are your raw material needs?
- What type of technology will you utilize for this project?
- Are there any prototypes or product samples that require checking out before moving on to the next phase?
- Does your desired item require a custom design?
- Will you use quality control services and when will they be necessary?
- What defect rate can you accept?
From sourcing raw materials and product testing to mass production and final inspection, list all information you need to know before finalizing a particular manufacturing partner because they will help you develop clear expectations about timeframes and product quality.
2. Not Having a General Frame
A new manufacturing project is an exciting endeavor, and often everyone is eager to get started. Though it may seem like you’re jumping right into things, please take some time to discuss this with your suppliers at the beginning. They will appreciate the main information they’ll need to understand what exactly it is that you want them to do.
Try not to overwhelm your vendor with excessive information from the start. It’s best to give them just enough information for them to understand what you need, but also keep in mind that they may have a standard procedure for whatever it is you’re looking for. To make sure things stay consistent, mention your expectations, standards, and deadlines early on. To do this efficiently, don’t go overboard when first explaining your needs. Remember that there might be certain procedures involved with whatever is going to happen.
3. Not Maintaining Constant Communication
Many companies make the mistake of not maintaining constant communication with their Chinese production partner.
To avoid mixed messages or missed signals, it’s important that you stay in contact with your Chinese suppliers for updates. Even something as simple as learning about the production progression can keep things more transparent, which can help to get your product made successfully and correctly, especially when you can’t be physically in China now.
Furthermore, if there are any problems or changes in the timeline, then you need to have a line of communication with your supplier so that both sides can react quickly. The sooner you catch a problem, the easier it will be to fix.
4. Not Involving Enough People
Manufacturing processes abroad tend to be far more complicated than initially perceived when you are new to the field, so it is important that you stay proactive and create a checklist of people to work with.
Your project will go through many different steps before it is completed. From a project manager, engineer, product designer, and quality inspector, ensure that every person you will work with knows what their tasks entail, so no one falls behind or ends up unprepared for an upcoming step.
Do not allow yourself to fall into the trap of continuing to allow the production process to have only a single perspective. Instead, expand the perspectives and make the same communication group. When things go wrong, it would be easier to know who has which responsibilities and thus you know how to optimize it.
5. Not Having a Continuous Improvement Process
In a project-based manufacturing environment in China, the ever-changing needs of design and engineering, combined with the constant demand for customized products make it so hard to produce anything without proper planning. Without constant improvement plans, things can go south very quickly.
No two projects are the same, so sometimes you may need additional resources, or you will want to adjust your team or process during the project.
You should always have a plan for anything that might go wrong when working with manufacturers abroad. In this case, it’s better to have a flexible and clear improvement process, allowing you to spot trouble early on and address issues before they get out of hand.
Consider Working with an Experienced Contract Manufacturer
Even if you plan, it can still be easy to get confused when selecting the right contract manufacturing company in China. This decision should not be rushed as many things need to be considered carefully as many different factors need to be considered, like proximity of the factory, capacities, costs, payment terms, communications with your team on-site as well as an understanding of whether or not the supplier will perform duties such as product design for you.
An experienced and reliable manufacturing partner can help to prevent and solve problems correctly. In this case, look no further than Shield Works.
Founded in 2020, we are an offshoot of the British-owned and managed C2W Group located in the South China Greater Bay Area offering high-quality and competitive contract manufacturing services. We focus on the provision of a tailor-made solution, and we communicate your requirements in your native language to avoid misunderstandings. Start your journey by reaching out today to discuss your product and learn how we can help.
The Risks of Outsourced Manufacturing: What You Need to Know
When you outsource your manufacturing, you’re trusting someone else to handle the job of turning your idea into a tangible product. While this usually works out well and can bring significant cost savings to your company, there are risks involved with outsourcing that you should keep in mind as you consider outsourcing as an option for your business or organization. Read on to learn about some of the most common risks of outsourcing manufacturing and how to avoid them so that you can maximize your benefits and minimize your costs.
Supplier Risk
Direct arrangements with suppliers from any industry come with risks. However, the risk is greater when buying from an international supplier. Prior to outsourcing, you must conduct a thorough investigation.
Then, you need to conduct a thorough risk assessment using the possible markets and suppliers. Identify any potential issues with the provider’s possible suppliers.
It must include the supplier’s operations, quality, leadership, and labor. Check to see if their track record lives up to their promises.
By doing so, you will avoid disruptions caused by your supplier failing to follow through. You can also ask other helpful businesses who have used your potential supplier. As soon as you make your decision, you’ll gain insight into working with them.
Quality Assurance
The lead time, as a result, for transporting products is longer compared to domestic sources, if product failure occurs from an international source, which can cost you suffer severe business disruptions.
If the problems get severe, it can take months to resolve them. To mitigate this risk, you need to prepare detailed product specifications for your sources. You’ll periodically perform independent quality control inspections.
You may lose your reputation if your product quality declines. Avoid this by observing the manufacturing process for a few weeks. It is cheaper and ensures quality, so it’s better than having to recall a product.
Intellectual Property Protection
Don’t share sensitive information with your outsourced manufacturers until you check their origin country and their intellectual property rights. Otherwise, your proprietary information might be leaked.
In cases like this, IP laws are more relaxed in the manufacturer’s country. Depending on the product, you may find it better not to outsource anything. If your product undergoes regular updates, however, this might not be an issue.
You might overlook patent protection if you think you can produce better items faster and with better quality. This can happen when you pump out new products faster than the market can handle.
Transportation and Delivery
Outsourcing to a foreign service is tricky if you don’t take it one step at a time. If you do it poorly, the delivery will be delayed.
A common timeline for ordering and receiving your product should be important to your outsourced manufacturer. Think about whether they can meet a timeline for production. In case the total is greater than it has been, you must work to make the customer’s expectations fit reality.
One may also look for a workaround to restore the time to its correct place. Otherwise, you may accidentally erase all your work. Given the importance of this issue to customers, we’ll need to keep it at the forefront of our priorities.
Sourcing Labor
This type of conversation doesn’t happen as often, but when it does, it can hurt your brand. Make and fulfill your products with a manufacturer that follows humane standards.
It is especially important when it comes to labor laws and other relevant guidelines for employee safety that your manufacturer’s guidelines match your own country’s. It is your responsibility as well as your outsourced help to adhere to ILO guidelines if your country is a member.
Weather
Despite how it might seem, what your manufacturer does in relation to the weather can affect how it’s perceived. A rough bout of weather can lead to various delays. Doing so puts your brand in a negative spotlight because it has to be revealed what your labour force looks like.
How well your supply chain holds up to weather-related crises can affect your reputation, as well. Though they’re flawed, it’s not always best to steer clear of your brand name. As a result, you must put it before anything else.
Should You Outsource Manufacturing?
If your company is not ready for outsourcing, you should weigh the benefits of this decision. A number of benefits are available to you.
You will cut your spending as well as boost the productivity of your business by doing so. Popular demands are produced by many companies.
Additionally, you’ll avoid every aspect of manufacturing bureaucracy. It’s what slows businesses down, especially in countries with strict regulations.
Invest in Outsourced Manufacturing Today
While there are risks involved, partnering with an outsourcing manufacturing company can be helpful in boosting your business productivity. The first step is to find a reputable manufacturer. Use this advice to find the best provider.
Have you been considering manufacturing internationally? If so, please get in touch with Shield Works and we’ll talk about how our 17 years of outsourced manufacturing can help your business thrive!
5 Questions to Ask Yourself When Selecting an OEM Manufacturing Company in China
Making products by outsourcing manufacturing to China can be an incredibly rewarding experience. Not only does it enable you to develop the item exactly how you want, but it also allows you to create high-quality products in much larger quantities than you would otherwise be able to make on your own. For these reasons, more and more entrepreneurs are choosing to manufacture their products in China by enlisting the help of an OEM manufacturing company.
However, with all the options currently available, selecting the right OEM company can seem like a daunting task.
Asking yourself the right questions before you begin production with a new partner can save you time and money in the long run, ensuring that you have an efficient manufacturing experience from start to finish. Let’s get started!
Question #1: What Are My Requirements & Standards?
The first question to ask yourself before approaching an OEM company is to develop an exhaustive understanding of your product. Not only should you have a general idea of the product, but also write down the product specifications in detail like:
- Colors
- Materials
- Dimensions
- Components
- Manufacturing techniques
- Manufacturing process
- Quality standards
- Packing requirements
- Import and export requirements
When you manufacture a product, the outcome can be drastically different based on what type of raw materials or techniques are used. It’s important to establish your criteria beforehand so that you know which company will create the best result for you.
Question #2: What Is My Budget Limit?
It’s important to define the upper limit of your budget when outsourcing your production to any supplier, because a more affordable company may not be able to provide you with the same quality and efficiency as a more expensive option. And you may not want to sacrifice the product quality just for saving a bit of money. That being said, while the price is certainly something you should consider when shopping for an OEM supplier, it shouldn’t be the only deciding factor.
However, it’s not a good idea to set an exact budget number right off the bat before all other factors are not considered.
In this case, you can estimate the price range for this manufacturing project based on what you think would work best for your company. Then you can also compare various service providers to have a better understanding of the perfect investment for your business.
Question #3: What Should I Do to Conduct Due Diligence?
After fully considering your needs, then you can conduct due diligence to know whether the manufacturing company is knowledgeable about your specific product type, or if it has worked with similar products before.
The best way to find this information out is by researching the company website to know their background, qualifications, service category, past work, etc.
You can also ask for references from a supplier you trust or reach out to other businesses that are manufacturing a similar product.
Doing detailed due diligence is not an easy task, check out our blog to know how to spot a real factory or a trading company in China.
Once you have all the relevant information, compare different manufacturers’ strengths and weaknesses against your needs and make a decision based on what will work best for your business.
Question #4: A One-Stop Shop Factory VS. Different Suppliers
Then you also need to think about do you want to use a one-stop shop factory that can fulfill all your needs or different suppliers who can specialize in different areas.
A one-stop shop factory is a model whereby one company manufactures, assembles, and distributes the product that they have been commissioned for. This factory can potentially increase efficiency and reduce production costs as a result of having all production processes under one roof. However, this could also limit your options for product customization if their manufacturing capabilities are limited.
If you need to make products with different materials or designs than what they produce, then you will need to find a different supplier. Furthermore, there may be certain materials or suppliers that are hard or expensive to acquire domestically in China so it may be necessary to find another supplier.
If time is not a concern and cost savings are your main priority, then finding one supplier might be the best option for you. However, if flexibility is more important for you, then working with multiple suppliers would be recommended.
Question #5: How to Guarantee My Product is Perfectly Working?
One way that a manufacturing factory can prove its commitment to quality assurance is by providing a sample of your product for inspection. In this case, requesting a product sample before placing your first order can be a good idea.
If there are any flaws, you have the opportunity to give feedback before mass production. In other words, if the manufacturer has nothing to hide, then there should be no problem with sending out a sample or a finished product for testing. This eliminates the risk of encountering problems and ensures your customers get what they pay for!
In addition, it’s imperative to look at whether your potential manufacturing supplier has an in-house quality inspection team or not. You want someone who will stand by you when things go wrong because inevitably something will go wrong at some point. If they assure you of having quality inspections available, ensure that the inspection report specifies what exactly is being inspected and which parts aren’t included.
Final Thoughts
Ultimately, your choice of manufacturer in China should be determined by what matters most to you and how much involvement you want with the production process.
Keep in mind that there is no perfect way of choosing a manufacturer but it’s worth taking some time to think about what’s important and how much you want to be involved in the process.
If you need any help, look no further than Shield Works. Founded in 2020, we are an offshoot of the British-owned and managed C2W Group located in the South China Greater Bay Area offering high-quality and competitive manufacturing services, supply chain management, quality control, and product development requirements.
We focus on the provision of a tailor-made solution based on your situation to meet your standards and requirements. Start your journey by reaching out today to discuss your product and learn how we can help.