Posts Tagged ‘manufacturing companies in China’
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.
Is Product Development in China Up to Snuff?
Product development in China has earned itself a reputation as one of the most innovative nations in the world. But just how good are the products that come out of China? Are they up to snuff? Some business owners find themselves questioning the value of outsourcing their product development needs to China, so let’s take a look at how the country stacks up against others when it comes to producing products that meet global standards.
It is still a good idea to outsource product development to China
The idea of outsourcing product development to China may seem strange to many. Most engineers and product developers assume that manufacturing abroad only applies to sourcing parts from other countries, but there are many advantages to having your invention made in China. Chinese companies, for example, often provide ready-made factories, so you don’t have to worry about setting up the factory space before production begins. The biggest benefit of outsourcing product development is the cost savings. there are generally cheaper manufacturing costs in Asian countries than in Western ones, which allows startups to take risks they otherwise wouldn’t be able to.
With years of development, China is able to produce quality products that meet international standards. Engineers and product developers think outsourcing manufacturing to China is a risky decision, since they are concerned about the quality of the products. American brands are realizing, however, how reliable Chinese companies can be as more use them for their projects.
Get off to a good start
Working with a partner who has impeccable standards and experience is the best way to avoid quality issues in the future. In spite of the numerous problems that can arise when making products abroad, you’ll want someone on your team who can spot these problems before they snowball. Working with an experienced partner will help you avoid major setbacks, whether it’s minor translation errors or hardware problems. Know what aspects of your product or business could cause problems. When unsure of anything regarding your production process, consult an expert or do some research.
For example, if you’re using a new material or technology for your product, it’s critical to know how that material will interact with other components. Whether you’re making a hard drive, an electronic device, or anything else that contains moving parts and circuits, you need someone who knows how these things work together. This can help you avoid quality issues that may arise later during production when pieces are put together in different locations around the world.
How long it takes
From preparing a prototype and testing it, to finding materials and ordering samples, bringing an idea to life can take up to six months on average. Consequently, product development timelines are dependent on various factors such as the creation of a custom mold instead of a mass-produced mold or production in China. This could result in significant changes in the timeline, depending on your design and goal. What will the timeline be for receiving your samples? It will vary based on what type of shipping you select. Ordering standard delivery is good for packages to reach you in two weeks or less; order express shipping and you’ll receive your package in one week.
But with COVID and geopolitics, everything still remains more or less unclear. It’s important to have an adaptable mindset.
How much you should invest prototyping
Getting prototypes made is often a great way to see how your product will look (and feel) and how durable it will be. It’s also worth taking into account the fact that prototypes have varying prices. If you are looking for low-cost prototyping solutions such as 3D printing, get quotes from multiple suppliers. Injection-molded parts can cost hundreds to thousands of dollars. Many manufacturers don’t charge their first-time clients much for printouts if cooperative desire is demonstrated.
It’s also important to consider how many products you will make. If you’re only going for one prototype, that might not be a bad place to start. But if you are trying to test multiple variables or aspects of your product idea, investing in several iterations could make sense. (For example, if you want both male and female feedback on a product before going into production.)
How to make sure you don’t get ripped off
Although you may be hesitant to send money to a company you don’t know, most clients choose to have an agreement in writing before making any payments. The agreement should include timelines for delivery, agreements for delayed shipping and detailed specifications. If you’re worried about your contract being followed to the letter, hire a lawyer who works in this area, or find a partner that has experience making goods in China. That way you can rest assured that there will be no mix-ups, you’ll get exactly what you wanted, and there’ll be less chances for headaches.
If you don’t have time to vet a partner thoroughly before entrusting your project to them, you could run into some problems, but investing your time up front into researching reputable ones will solve the majority of potential issues. From the UK and with a 17-year history in product development, Shield Works definitely understands your language. Give us a call and find out more!
IPR Protection: Why Do You Need to be Smart about Your Ideas
Developing an invention that could potentially make you millions can be exciting, but it’s also important to realize the legal responsibilities involved. If you don’t know how to protect your idea, you risk losing it altogether, or at least never realizing its full potential because of an infringement.
Curious about intellectual property rights? Don’t know what an IPR is, or why it matters? It’s time to get yourself up to speed on this essential aspect of business that affects all inventors and entrepreneurs.
In this article, you’ll learn about the basics of IP protection when manufacturing in China, what it can mean for your business, and some ways to protect your ideas in the long run.
What Is Intellectual Property?
Intellectual Property (IP) is an umbrella term describing the set of intangible assets that are legally protected by a company or person from unpermitted use.
Intellectual property consists of different forms of assets, including trademarks, patents, and copyrights.
Trademarks
A trademark can be a word, phrase, symbol, design, or a combination of these elements that distinguish a specific item from the rest.
For example, the Coca-Cola Company has registered its Coca-Cola® trademark in both standard character format and special form formats.
Patents
A patent is an exclusive right granted for an invention, which could be a design, process, improvement, or physical invention such as a new machine.
For example, the patent for the personal computer was filed in 1980 by Steve Jobs and three other colleagues at Apple Inc.
Typically, there are three types of patents:
- Design patents
- Plant patents
- Utility patents
Copyrights
A copyright is a collection of rights that automatically vest to someone who creates an original work of authorship.
A copyright protects an author’s right to reproduce the work, prepare derivative works, distribute copies, and perform and display the work publicly.
The most common copyrights include:
- Literary works
- Musical works
- Dramatic works
- Pictorial, graphic, and sculptural works
- Architectural works
What is IP Infringement & Why Should it Be Avoided?
Intellectual property infringement refers to the act of violating works that are protected by IP laws. This can happen in a manufacturing environment where the manufacturer copies the idea or design without permission from the original owner.
Nowadays, many overseas companies spare no effort to identify and protect intellectual property due to its high value in their businesses.
IP is essential for making sure that your hard work and creativity are credited to you. Having the satisfaction of knowing others use what you create makes it all worthwhile.
Not only does developing high-quality intellectual property take a substantial investment of time and intellect, but also requires an organization or individual to put in hours of work. It would be unfair for another party to access this knowledge without the consent of those who invested so much energy into its creation.
IP infringement can come in many forms, including unauthorized use, copying, reproduction, or distribution of materials protected by Intellectual Property Rights and counterfeiting products intended to mislead consumers.
So, protecting IP and avoiding IP infringement are serious matters.
How to Avoid IP Infringement When Manicuring in China?
Manufacturing products overseas can be challenging. When it comes to working with a manufacturing company in China, you need to take precautions to avoid any type of IP infringement. There are a few tips you can take to protect your invention from legal troubles.
1. IP Registration
IP rights are territorial rights, which are only applicable in the country or region where they are filed and granted by the law of that country or region.
If you manufacture your product in China (or anywhere outside of your home territory), which mentions or reflects your brand, then you must register that trademark locally even if you don’t plan on selling it there.
Registering for trademark protection can save your business from being ripped off and taken away. It protects your intellectual property rights because if you don’t do this somebody else will take advantage of the opportunity and steal your idea or design and produce them under a different name in China.
2. Confidentiality Agreements
The next necessary step is to sign an IP-protected agreement with your manufacturing factory to safeguard your confidential information.
In China, the most used contract is an NNN agreement, which means Non-disclosure, Non-use, and Non-circumvention.
Make sure the contract includes a confidentiality clause that prohibits your supplier from disclosing information about the product and its design or production process.
3. Intellectual Property Insurance
If the defense mentioned above doesn’t work, or you still have a great concern about your IP, then you can carry intellectual property infringement insurance in China.
However, such insurance is not widely used in China and is rarely covered by a standard business insurance policy, so it is not as effective as you think.
4. Work With a Reliable Manufacturing Supplier in China
It is essential that you are diligent and strategic with your intellectual property right protection so that your invention won’t be stolen or copied by someone else, which would prevent you from making money off it.
For this reason, it’s important to establish a strong IPR protection strategy from the beginning. Working with a reliable manufacturing supplier in China can help you protect your product design, production process, and ideas for new improvements or modifications.
If you’re looking for a company that has all your security needs covered, look no further than Shield Works. We are a British-owned and managed company that specializes in the high-quality and competitive rate of contract manufacturing and product assembly services. We follow a rigorous process to safeguard your IP with our 70,000-square-foot facility. Start your journey by reaching out today for more information and see how we will be able to make them worth every penny!
3rd-party Quality Control Service in China: Your Key to Protecting Your Product
A lot of people are considering sourcing their products from China, and this isn’t without good reason. However, one concern that many people have with sourcing from China is whether the product they purchase will be safe to use once they get it in their hands. Thankfully, there are ways to ensure that your product arrives safely, including the use of 3rd-party inspection services in China. This article will discuss this important part of any China sourcing process in greater detail and provide you with tips on how to choose an ideal 3rd-party inspector for your project.
Why it’s important
It is of the utmost importance to control quality in manufacturing. It’s common knowledge that quality control is crucial for any product, but many people overlook how important 3rd-party quality control services in China can be in ensuring product safety. Get quality control services from a qualified 3rd-party like C2W. With quality control services, you will never worry about getting faulty products again. Invest in trusted 3rd-party quality control services today if you want quality products every time!
Reason to choose a 3rd-party quality control service
You can ensure your product arrives at its destination without any defects or flaws by using a 3rd-party QC company, and you will also show potential customers that you care about quality and safety. Whether or not you hire a 3rd-party quality control company comes down to the fact that a 3rd-party inspection does not change your product safety standards. Prior to shipping your product out of China, you will have an expert ensure that all of your requirements are met. There is a greater chance of making a mistake along its route toward distribution, resulting in money and time loss on your part.
How to pick the right one?
When you find a company with experienced 3rd-party quality inspectors, be sure to take a good look at their certifications. 3rd-party certification and ISO 9001 compliance should come up. Professionals who are trained for audits, inspections, and analyses: a certified professional is worth it and all that counts is how much experience the professional has. Once you’re in the process of selecting inspection services, be sure to inquire about the companies’ methods. You will want to know what systems of internal quality control the company follows and whether inspectors will use a random sample or a statistical model.
You’ll want to ask about turnaround times. Inspections are not cheap, but then neither is a recall or a lawsuit from faulty products. There’s no point in rushing your inspection or ordering one that doesn’t offer enough quality assurance for your standards. Do it right from day one. And don’t forget – if you’re still worried about a product after it gets its certificate of quality, don’t be afraid to ask for another inspection. This will show your commitment to quality and protect both you and your customers down the line.
What do they look for?
Inspectors may study an array of features of a product and its packaging including how it was constructed, what materials were used, how it was packaged and labeled, whether it complied with safety standards, and so on. If a product was intended for children or if it was inherently unsafe, inspectors would look for warnings labels or other ways to inform consumers of potential hazards. Items such as stuffed animals are also subject to inspection to make sure they’re safe for children to play with. Inspectors check that children won’t choke on them or hurt themselves. Lots of people have one electric device tested by checking to see if sparks fly and also to see if there’s anything exposed that could give you an electric shock.
What can you expect from them?
In China, there are many 3rd-party QC companies offering QC services. How do you know which ones are good? In addition to being qualified, a 3rd-party quality control company should possess a wide range of certifications related to quality control. Ask for references if you are unsure. Do not just rely on their word. Furthermore, it is important for your supplier to work with them as well, so that there are no errors caused by miscommunication along the way.
Inspectors from 3rd-party QC companies should be able to speak and read English. As mentioned before, it is important for your supplier, as well as your customer, to understand exactly what was inspected and what problems were found. If there are any disputes over defects found on a product during an inspection, you will want a translation that is easy for everyone involved to read and understand.
You should also make sure that they have inspectors with years of experience working on products similar to yours. It is all too easy for an inexperienced inspector who doesn’t know much about your product or industry to miss some kind of defect – even one that could easily impact how well your product works once it gets used by customers.
Major Takeaway
In China, your manufacturer may tell you that hiring a QC service is unnecessary because their products come with quality warranties, but when things go wrong, that warranty means nothing. A 3rd-quality control service will protect you against defective manufacturing and ensure safe delivery of your goods. There aren’t all 3rd-party inspectors created equal, so consider how often they’ve worked on your product and choose one who you trust.
Contact us today to learn more about quality control services for Chinese goods, or to speak with one of our experts in the quality control industry!
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.
7 Benefits of Working with China Manufacturers You Must Know
Deciding whether to outsource your manufacturing to China can be an overwhelming process, but there are many reasons to choose China as your manufacturing hub. Here are five of the most important benefits you should consider before making a decision.
Lower Costs Than Western Counterparts
One of the primary benefits of outsourcing your manufacturing to China is the lower labor costs.
Besides having fewer overhead costs, Chinese facilities also have lower training costs. In order to cover these costs, domestic manufacturing facilities must set aside a significant amount of money.
Businesses of all types outsource instead, as wages in China are also lower than in the United States.
When you outsource, you can spend less per dollar, so you can reap the benefits that can come from using Chinese product assembly. Keep this in mind when you are considering moving forward.
Larger Production Volume
A business does not necessarily need to manufacture thousands of products in one order. However, in some cases, large organizations often have a hard time locating a domestic facility that can meet their bigger-than-normal needs.
This means that China has typically built facilities that are able to produce large volumes of goods for many different countries. Even an average Chinese factory can outperform the vast majority of western facilities.
When it comes to companies that require a massive supply of their product, there is no better alternative than outsourcing to China. In many cases, it is also the only way to meet your goals.
Diversified Production
To long-term success, scaling your business may be needed.
This can happen in a variety of ways. For example, you might add a new product line to generate additional revenue.
One option would be to find growth opportunities in one of China’s developing markets. That way, you can use them to establish a niche in your business. Designing new products is one of the key ways in which they help.
Choosing a Chinese OEM plant, in some cases, might give you an edge over your competition.
Flexibility of Product Design
Domestic facilities usually cannot adjust their design at your behest because it could take them days or weeks to actually put them into practice.
You may have to change the way you do business to sell a more desirable product if you don’t have high enough sales numbers. Adding to this, delayed orders because of design changes also carry the risk of your customers turning to competitors.
It is our understanding that Chinese manufacturers are ready to implement any changes required of them. As for you, all you need to do is contact the representatives from your company and describe the alterations that you need.
The manufacturer will typically make revised products as soon as possible after you inform them of your change, which is an important consideration as it will affect your brand’s reputation.
IP Protection
Many people are unaware that many Chinese factories prioritize intellectual property protection.
This means they make sure you don’t end up in legal trouble by avoiding any form of infringement. To illustrate, suppose you sell a product that is extremely similar to that of your competitor.
As with any other manufacturing industry, there are shady facilities that engage in such tactics. A reputable factory in China will make sure that there is no copying or reverse engineering going on.
It is good news that you can research the reputation of your prospective factory before choosing to work with them. Otherwise, you may find yourself in a situation that is difficult to remedy.
Efficiency
China’s factories are capable of mass production, and it is a simple matter for them to do so with remarkable speed.
These new and efficient facilities can meet any production standard. This will allow smaller organizations to compete with larger ones.
Many small businesses can’t keep up with the production rates of large corporations. Without the help of the right manufacturers, these businesses will never be competitive.
Tips of Finding The Factory Right for You?
It can be difficult to find a reliable Chinese manufacturer for all sorts of reasons, like time zone challenges and language barriers. With the help of a professional, you will be able to get a firm grasp on which factory is best for your company.
You’ll find that they are a go-between who has contacts at the other party’s end. That way, they’ll be able to work out the finer points and make agreements without you even needing to intervene.
You can take a look at this resource to find out how you can use this to your advantage.
We Are You Go-To Option
With the above information in mind, you can be sure that you are deciding the right course of action for your company.
From here, you’ll be able to employ Chinese manufacturing for appropriate businesses. Want to learn more about Shield Works with 17 years of China manufacturing experience? Please get in touch with us today and see 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.