Posts Tagged ‘Shield Works’
Everything You Need to Know About 3PL Warehousing in China
So, you’ve decided that your supply chain needs a little help. Maybe you’ve got too much work for your in-house team to handle, or maybe you’re just looking for someone with more skill than you have.
There are a lot of reasons you might find yourself in this situation, but the solution is always pretty clear: hire an expert. 3PLs (third-party logistics providers) specialize in warehousing and distribution. They have the infrastructure and knowledge to get your products where they need to go – on time and on budget.
For a look at 3PL warehousing and how hiring one can help improve your supply chain, read on.
What Is 3PL Warehousing?
A 3PL can provide warehousing services for your wholesale products, manage all aspects of your inventory system, and even help you develop the processes necessary to ship orders from your store on time.
This means that when someone places an order through your eCommerce website, the 3PL will receive the order and store it in one of their warehouses until it’s ready to be shipped out.
3PL Services vs. Drop Shipping
Drop shipping is a product-based business model that allows merchants to sell their goods without having to store or ship the products themselves. When you drop ship, you place an order with a supplier, who then ships to your customer on your behalf.
3PL services offer more flexibility than drop shipping because they allow you to outsource all aspects of logistics, including warehousing and shipping. Unlike drop-shippers who have limited control over the process, 3PLs provide the additional benefit of greater oversight over storage conditions and quality control during storage and transit.
Why Choose 3PL Warehousing?
3PL warehousing offers several benefits to businesses that want to outsource their storage and fulfillment needs. These include:
Save Time and Money
One of the most important benefits of 3PL warehousing is that it can save you money by reducing your overhead. You’ll no longer have to worry about rent, maintenance costs, and equipment purchases for your warehouse. A 3PL provider can also help you reduce your staffing costs and avoid payroll taxes.
Improve Your Customer Service
With a 3PL partner, you’ll be able to offer more shipping options, shorter lead times, and faster delivery at lower prices than you could if handling shipping on your own. You’ll also be able to offer better customer service by responding more quickly and effectively to customer queries, as well as tracking orders. Your customers will appreciate having access to accurate information about the status of their orders.
Get the Right Products to the Right Customers
With a 3PL partner, you’ll be able to take advantage of their years of experience and relationships with freight forwarders, customs brokers, airlines, trucking companies, and others in the supply chain.
You can also get a leg up on your competitors by taking advantage of their global footprint and selling products in markets that are otherwise inaccessible. Your 3PL might even help you find new products for specific regions and give you the ability to test your ideas before making an enormous investment.
Expertise in Logistics Management
Third parties generally have more experience handling inventory than many small businesses do; therefore offering valuable industry-specific knowledge. They’ll know how to move your product in the most efficient and effective manner possible, whether by rail, air, or sea.
How Does It Benefit Your Business To Use A 3PL Warehousing Company?
You might think to yourself, do I really need to outsource my warehousing and logistics operations? The answer is maybe. It depends on many factors unique to your business, including size, product mix, growth plans, and more.
However, there are some general benefits that usually make working with a third-party logistics provider in China the right choice for most businesses.
Reduce Risk
By outsourcing some of your operations to third-party logistics companies, you’ll be able to reduce the amount of risk involved in doing business overseas without sacrificing any of the benefits associated with having a Chinese presence(accessibility, increased market share, etc.). This is because these providers have the experience, infrastructure, and local knowledge needed to help you navigate China’s unique business environment.
Improved Efficiency
When a single company handles all logistical processes for error. This allows your business to run more smoothly, freeing up time and resources that can be better spent elsewhere. And with most third-party logistics companies, you’ll also have access to state-of-the-art equipment, which will allow them to handle all of the heavy lifting so you don’t have to.
Increased Productivity
When outsourcing logistics services, companies can focus on what they do best while leaving order fulfillment to another team. This means that your company will be able to get more done with fewer people – which increases overall productivity for everyone involved.
How 3PLs Handle Order Fulfillment
Once the order is received and processed by your 3PL, they will then assign it to a warehouse closest to your customer. From here, a picking team will gather the items from their respective racks and put them into totes or carts for the next step: packing.
Afterward, another team will ensure that everything was picked correctly before boxing it up for shipping. At this stage of fulfillment, your provider will add any extra packaging materials, like bubble wrap or peanuts, to guarantee safe transport. After being packed up, all orders are ready for delivery!
In some cases, orders may need to be returned before they can be shipped out again. This is usually because of damage caused during transit. Your provider will inspect the package first before sending it back.
When Do You Need a 3PL Warehouse in China?
If your company ships at least 100 orders overseas each month, it’s probably time to consider working with a third-party logistics provider in China. But 100 is not the hard and fast rule, as many factors can affect this number.
There is no magic number at which time a company should start working with a 3PL. When you find your business growing so much that the volume of orders being placed has become too high for your small team to manage in-house, then it’s time to hire a 3PL.
There are some other signs that can help you determine whether you need a 3PL. If any of the following apply to your business, it’s time to look for a 3PL warehouse in China:
You’ve Run Out of Storage Space
Perhaps you started your business in a small office space with enough room to store inventory on-site. But as orders start rolling in, that space quickly becomes crammed. If you can’t store products, how can you possibly fulfill orders?
Working with a 3PL will give you access to more storage space so you can keep meeting customer demand.
You’re Spending Too Much Time Shipping Orders
If it’s taking up too much of your time and energy managing shipments, then it might be time for some help. A quality 3PL will have the resources and technology needed to get products out the door in a few hours.
Your Employees are Stretched Thin
As your business grows, chances are good that your team is being pulled in different directions, trying to handle everything at once. This can lead to mistakes, frustration, and even burnout. Adding a 3PL to your team can take some of the pressure off by lightening the workload.
10 Tips to Find the Best 3PL Services Company for Your Ecommerce Business
Just like with any other decision, you want to make sure that the 3PL provider you choose will help optimize your business and not hinder it. However, this is easier said than done.
With so many 3PL service providers out there, how can you ensure that the one you choose will be right for your business? Here are some tips:
1. Start with Reliability and Speed
As an e-commerce company, it’s important to make sure that your products go to consumers fast and get delivered without any kind of damage. Ask your potential provider about their average shipping times and any procedures they have in place to prevent or address damages during transit.
A provider with same-day shipping can be especially useful if you offer expedited shipping services.
2. Consider Their Ability to Handle Returns
Ecommerce businesses typically have a higher return rate than brick-and-mortar stores, so it’s important that your 3PL provider can handle returns efficiently. Find out what kind of system they have in place for managing returns and ask about how they communicate with customers regarding status updates on refunds or replacements.
3. Pricing Matters, But Don’t Sacrifice Quality
Of course, you want to save money wherever possible, but with your 3PL services provider, quality should be more important than price. Make sure you compare apples to apples when getting quotes.
4. Experience Working In Your Industry
Ensure they have the right equipment and technology to handle your products. But more importantly, they should have experience working in your industry so they understand the unique challenges that come with it.
For example, if you’re in the fashion industry, you’ll need a 3PL that can handle delicate and high-end items. If you’re in the food industry, they should have processes in place to prevent cross-contamination.
5. Client Support
Ideally, your 3PL is easy to reach when you need them and quick to respond. Good communication is key in any relationship, so make sure the lines of communication are open between you and your fulfillment partner. Of course, China’s time zone difference can present some challenges, but a good 3PL will have someone available during your business hours.
6. Flexible Pricing Options
While price is always a concern, you don’t want to be locked into a per-unit charge that doesn’t reflect your monthly storage and processing needs. Look for a 3PL that offers options like minimum commitment pricing or value-based pricing, rather than charging you by the unit.
Some providers charge per square meter of warehouse space used; others offer discounts based on the number of units shipped per month. Whatever the case, make sure you understand your 3PL’s pricing structure before signing a contract.
7. Technology Integration Capabilities
Perhaps the most important criterion on this list is integration capability. Do their systems seamlessly connect with yours? Can they automatically track and update inventory levels in real-time so that you always know exactly what’s in stock and where it is?
If not, keep looking. The best providers offer comprehensive tracking capabilities and a simple customer portal.
8. Order Consolidation
When your customers are ordering products that come from several vendors, a 3PL that can merge those orders into a single shipment can be a huge time—and money—saver. When evaluating providers, inquire about their order consolidation capabilities.
9. Customization
Some of your customers may have specific requests; they need a custom-sized box or a gift-wrapped item, for example. If you can find a provider that can customize orders to meet the needs of your unique clients, you’ll be able to streamline and improve customer experiences.
Also, it helps if your provider can offer custom branding on the shipping boxes. This is a small but powerful way to reinforce your brand and keep it fresh in your customers’ minds.
10. Reputation
Last but not least, don’t forget to ask for customer references. Talk to others who have used the 3PL you’re considering and get their honest opinion.
Expand Your Business Reach
3PL warehousing can help you expand your business reach by allowing you to enter new markets and create new distribution channels. Not only will you be able to offer faster delivery at lower shipping costs, but you can also take advantage of their experience in international shipping.
Whether you are looking for short- or long-term storage warehousing solutions, Shield Works has the experience and expertise to provide you with cost-effective storage and shipping solutions. Reach out to us for warehousing processes that help you succeed.
Choosing the Right Product Manufacturer in China: Contract Manufacturing vs OEM Manufacturing
Contract manufacturing, original equipment manufacturing, and ODM manufacturing, oh my! There are so many different types of manufacturing companies that you can use to fulfill the needs of your business.
When you need to manufacture your product, you will want to pick the one that best protects your intellectual property while upholding the best labor practices possible.
If you are looking for more information about these product manufacturers and how to choose the right one, you came to the right place. This brief product manufacturing guide will cover all you need to know about the common manufacturers and who you can reach out to for more guidance.
What Is Contract Manufacturing?
Contract manufacturing is when you outsource part of your product’s manufacturing process to a third-party company. A large majority of companies use this method, so they don’t have to handle the bulk of their production process. Instead, a contract manufacturer manufacturers products for the OEM, producing items based on a set formula or design.
Advantages of Contract Manufacturing
A significant advantage of using a contract manufacturer is that they can help you create your products without investing in machinery or equipment. This also allows you and your business to minimize labor costs, free up capital, and commit additional resources toward research and development. Contract manufacturers also accept a certain amount of manufacturing-related liability.
Disadvantages of Contract Manufacturing
A major disadvantage of working with a contract manufacturing company is that there is more research and development work. The time to market your product is also a disadvantage.
Because it takes a bit longer to get the product, you will have to wait. Be sure to have a testing and validation plan from the beginning so you and the manufacturer can adjust it over time.
Types of Contract Manufacturing
There is a wide range of contract manufacturing services available. Standard contract manufacturing services include molding, assembly, machining, packaging, and sterilization. It is imperative that you partner with a contract manufacturer that provides the right services needed to support your product.
ODM Manufacturing
ODM manufacturing, also known as Original Design Manufacturer, is a business that creates products designed by you, but they are based on existing products. When you work with these types of companies, you purchase items that the factory already produces; you can just customize the items and add your logo.
You don’t always have to change the logo or design unless you want to. China is currently the leading ODM manufacturer, and most manufacturers outside of China are contract manufacturers.
Advantages of ODM Manufacturing
When you work with an ODM manufacturer, you don’t have to wait too long to market your product. There is also a much lower introduction price since you don’t have to go through the research and development process. ODM manufacturers also have strong expertise in technologies and in the market space.
Possible Issues with ODM Manufacturing
ODM manufacturers have the ability to send out your products quickly because they already have the item on hand or the specifics of the item on hand. A significant issue that comes with working with an ODM is intellectual property and who owns the design of the product even after you add customizations.
For the most part, the manufacturer created most if not all of the design, so they technically own the product’s intellectual property. This means that you own the copyright to the branding.
If you decide to work with an ODM manufacturer, make sure that you check the product you wish to customize. If the product looks similar to another name brand company, they can sue you for using their intellectual property.
OEM Manufacturing
OEM, also known as Original Equipment Manufacturer, is a company that creates a product based on the blueprint you send in. When you create a partnership with an OEM manufacturer, they expect you to provide them with a product specification sheet and a product design document so they can make your product properly.
There are several different varying degrees of original equipment manufacturing companies. Some of them already have a product on site that they can use to make changes to, or you can start from scratch and create a brand new product.
If you plan on creating a brand new product, you may want to reach out to a contract manufacturer for more assistance. With most original equipment manufacturing projects, the client must create custom molds or some other tooling to create the item.
If the OEM does not already have what you need, they will need time before production to get that all prepared. This is a cost most clients have to bear upfront, but there are other manufacturers who purchase molds and just charge you after the fact.
Intellectual Property with an OEM
Since you’re the product designer and you created the product specification sheet, you most likely own the intellectual property of your product. Since you’re also paying for the parts of production (tooling and molds) and you have contracts that prevent the manufacturer from using the specification of your product, the intellectual property is yours. Just to be safe, make sure that you protect your intellectual property with the appropriate documents.
Advantages of OEM Manufacturer
The time to market with an OEM manufacturer is typically relatively short. This is because the original equipment manufacturer already makes products similar to yours, and they can use their current suppliers. Working with an OEM manufacturer comes with lower research and development costs.
Disadvantages of OEM Manufacturer
Although working with an OEM manufacturer comes with several beautiful advantages, a few significant disadvantages can affect your project. For example, if you have to change suppliers, you can’t just make a quick switch.
You will have to change up your entire supply chain. This means you will need a new component supplier as your OEM won’t disclose their component supplier to you.
Because these sub-suppliers are not disclosed to you, there is a chance the OEM could switch out sub-suppliers without you knowing. This could significantly affect the quality of your product.
How to Find a Product Manufacturer
Before you can look for the right product manufacturer for your needs, you must decide if you want a factory overseas or here in the United States. The best solution for your business needs depends on your personal goals and priorities.
Advantages and Disadvantages of U.S. Manufacturing
Using a factory in the United States does come with a few benefits. For example, when you use a manufacturer in the United States, you have more direct control over overproduction. You have the opportunity to visit the site more regularly, and you avoid dealing with international shipping logistics and tariffs.
Unlike overseas factories, manufacturers in the states allow you to order smaller batches of products. Overseas, they have minimum order requirements that you must meet before they fulfill your order. If you don’t meet the minimum, they may add an additional fee.
One of the most significant disadvantages of working with a supplier in the United States is the fact that they cost more. Sure, you may have access to the supplier, but they typically charge more since they are closer.
Advantages and Disadvantages of Overseas Manufacturing
A factory overseas is almost always cheaper than using one in the United States. When you look for a product manufacturer overseas, you will notice that you have more options than you do in the United States.
This means you will have a large pool of applicants to choose from who have experience creating products similar to yours. The biggest challenge that comes with outsourcing is the longer shipping times and handling of import/export regulations.
There is also an issue of a possible language barrier. Thankfully, there are several different companies that have a dedicated representative that can communicate your needs in your language.
Look for a Product Manufacturing Plant
You can attend several networking events for more information on other Chinese manufacturing plants. International trade shows in the United States are another great resource to use when looking for the proper manufacturer.
When looking for the right company, make sure they make products similar to yours. A manufacturer may be eager to let you know that they can make it, even if they have no experience doing so.
Although this may work in some factories, that does not work with all of them. If they offer to create the product but have no experience, the product may lack quality.
United States Exports
Lastly, it would be best if you looked into a manufacturer that regularly exports products to the United States. These manufacturers already have experience complying with product safety standards, quality standards, and packaging requirements.
Look for a company that is a Wholly Foreign-Owned Enterprise. Wholly Foreign-Owned Enterprise, also known as a WFOA, is a company that has production facilities in China. Still, the ownership and management of the company are run by non-Chinese teams. Depending on who owns the facility, you can expect the same quality and service that you would receive from a western company.
Protect Your Intellectual Property
As mentioned earlier, regardless of who you use to manufacture your products, you will want to protect your intellectual property at all costs. Without that protection, you risk having the manufacturer sell your product to another client.
You can use trademarks, copyrights, and patents to protect your intellectual property. Make sure that the protection you use is also designed for international situations.
If you would like to, you can use an NDA. An NDA, or a non-disclosure agreement, is a legally binding contract prevents other companies from copying your product. It would be best if you made potential manufacturers sign an NDA before you get any quotes.
Questions to Ask the Manufacturer
Before you partner with a manufacturer, you must ask a few questions to ensure they are the right fit for you. For example, make sure to ask the company about their labor practices.
The last thing you want is to work with a company that uses unfair labor practices. Not only is that inhumane, but it can also damage the reputation of your business.
Ask to see their business license and any documentation that proves they have a solid quality control system. It would also be best if you asked about their proof of inspections or their third-party audits. If a company refuses to give you that information, they may be hiding something.
Additional probing questions to ask your potential manufacturer:
- What is the price for production?
- What are your company’s payment terms?
- Do you have a minimum order quantity?
- How long does it take to get the product exported
- Who are some of your clients?
- What experience do you have making products similar to mine?
- Do you charge for samples?
- Is all of your work in-house?
- Do you use sub-contractors?
Asking these types of questions can help you determine which manufacturer is best for you and your needs. Don’t be afraid to ask clarifying questions. You’re hiring them to do a service for you at the end of the day.
Partner with the Best Product Manufacturer
Picking out the right manufacturer does not need to be a complex process, but it can be challenging if you aren’t sure what you’re exactly looking for. Once you figure out which type of product manufacturer you want to use, check out their reviews and business licensing.
You want to make sure you partner with a reputable manufacturer that can make your product just the way it is intended to be made. Contact us now if you are ready to learn more about your manufacturing options. We also offer warehousing and logistics if needed.
Common Mistakes Companies Make With Outsourced Product Development
Did you know that 66% of companies with more than 50 employees outsource at least one of their business functions?
If you want to bring in a third party to perform a service for you, you might be interested in outsourcing product development.
Outsourcing this function can be a great way to get your products to market quickly. But it’s important to ensure you do it correctly. Mishandling the process can lead to costly disasters, including business stoppages.
Understanding the common mistakes with outsourced product development will be a good place to start. So read on to learn about some of the most common pitfalls you should avoid when outsourcing product development.
Not Defining the Project Scope Upfront
When outsourcing product development, it’s important to develop a clear and concise scope of work.
The last thing you want is ambiguity around what your outsourcing partner needs to deliver. Ambiguity can lead to frustration on both sides and could even result in abandoning the project altogether.
Make sure you have a solid understanding of what you need the partner to deliver and that you communicate it to the outsourcing partner upfront.
Clarity will ensure that both parties are on the same page from the outset and will avoid any misunderstandings further down the line.
Not Conducting Due Diligence
You’ll be making a mistake if you choose an outsourcing partner without knowing about their capabilities. Start by researching the company and its track record. Ensure the partner has the experience and expertise necessary to deliver on your project.
For example, if you’re outsourcing to China, you’ll want to check that the company has experience with China’s product development. Your China manufacturing partner should also be transparent and dependable so you can get answers whenever you need them.
Failing to do this due diligence can lead you to choose a partner that doesn’t have the necessary skills and experience. You’ll experience significant delays, and cost overruns as the inexperienced partners try to get up to speed on the project.
It’s also important to visit their facilities and meet with their team to better understand their processes and culture.
Not Having a Backup Plan
You might make the mistake of thinking that you’re safe working with a single outsourcing partner. After all, it can be tempting to put all your eggs in one basket. Relying on a single vendor can be risky.
Your outsourcing partner can go out of business or experience other difficulties. In such cases, you may find yourself without a product and a way to get your project back on track. That’s why it’s vital to have a backup plan in place.
This might mean working with multiple vendors or keeping some internal staff on hand to pick up the slack if needed. The goal is to ensure that someone can step in and take charge if your outsourced product development team is not meeting expectations.
A contingency plan will ensure you’re meeting your customers’ expectations even during unexpected difficulties.
Not Protecting Your Intellectual Property
It’s likely to ignore protecting your IP rights when outsourcing product development. Without adequate protection, someone might steal or copy your intellectual property. Such actions will prevent you from reaping the benefits of your investment.
You might be unaware of the risks until it’s too late. You can avoid this mistake by having strong contracts that clearly define who owns the intellectual property. The contract should also state the protections that exist.
You should also consider using nondisclosure agreements to protect your trade secrets. Such agreements will ensure that any IP created as part of the project remains your property and is not transferred to the outsourcing partner. You’ll protect your IP if you terminate the outsourcing relationship.
Not Being Prepared for Culture Clashes
Outsourcing product development to another country can lead to cultural clashes. There can be a difference in working styles, communication styles, and even values.
For instance, suppose you’re a western company outsourcing development to China. There will be a significant difference in how both cultures conduct business.
Chinese culture may place a higher emphasis on relationships. Your western culture is likely to be more results-oriented.
It’s important to be aware of such differences and make allowances for them. If possible, try to have someone on your team familiar with the outsourcing country’s culture.
You should also have clear communication channels and establish agreed-upon working hours. This will help to minimize misunderstandings and enable you to work more effectively. An understanding of cultures will also prevent disruptions to the project.
Failing to Manage the Relationship
Outsourcing product development is not a “set it and forget it” proposition. Once you’ve chosen a vendor, you need to manage the relationship. You should set clear expectations, communicate often, and monitor progress.
Many companies make the mistake of outsourcing and then forgetting about the project. This can lead to big problems down the road. You’re more likely to end up with a subpar product if you don’t invest in a good relationship with your partner.
You should be proactive and involved in the project. You should set clear milestones and expectations at the outset. It’s also vital to maintain regular communication with the outsourcing partner.
Stay on Top of Common Pitfalls with Outsourced Product Development
Outsourcing product development can be a great way to save time and money. But it’s important to avoid these common mistakes if you want to ensure a successful outcome. By being aware of common mistakes with outsourced product development, you can set your project up for success.
If you’re considering outsourcing development to China, consider having Shield Works as your outsourcing partner. We have 17 years of experience in product development in China, which makes us confident that we can guarantee you 100% satisfaction.
Contact us today to discuss your project.
NNN Agreement: How To Protect Your Intellectual Property In China?
There are a lot of things you can do to proactively protect your intellectual property (IP) when you are outsourcing production into China.
The Chinese NNN agreement may be one of the most important parts of the overall picture.
If you want to hear about NNN agreements, you are in the right place.
In this article, you will learn what’s involved in an NNN agreement, why you need it, and how it can help your business succeed in China.
What is an NNN Agreement?
So, first thing first. You may want to know the definition of an NNN agreement especially if you are new to Chinese manufacturing.
NNN stands for non-disclosure, non-use, and non-circumvention. The three Ns include:
- Non-Disclosure: Don’t tell anyone
It means that the counterparty can’t disclose any confidential information you provide.
- Non-Use: Don’t use the information
This means that the counterparty can’t use your IP for any purposes other than for your benefit under the contract.
- Non-Circumvention: Don’t go around your back
It means your manufacturing contractor can’t circumvent you and sell to your customers directly, usually at a lower price.
An NNN Agreement is a type of confidentiality agreement used in business dealings with Chinese companies, particularly Chinese manufacturers.
An effective NNN agreement can be used to protect your confidentiality such as product details, drawings, marketing strategies, etc. when working with manufacturers directly in China.
It’s a Chinese equivalent to the western world’s Non-Disclosure Agreement (NDA).
The Difference between An NDA Agreement and An NNN Agreement
A Non-Disclosure Agreement (NDA) focuses on protecting trade secrets in the US. while an NNN can be used to safeguard IP in China.
To be considered protectable property, a trade secret must stay a secret. As such, NDAs are typically aimed at preventing the disclosure of trade secrets to members of the public.
Therefore, an NDA agreement focuses narrowly on confidential information from being revealed to the public.
Typically, an NDA agreement is written in English, subject to U.S. law, and exclusively enforceable in a U.S. city and state.
The Advantages of a Chinese NNN Agreement
Whether you work with an existing Chinese manufacturer or looking for a new one, building and signing a legitimate contract will guarantee the safety of your company’s confidential information.
Here are some good reasons why you should sign up for an NNN agreement.
1. Protect Sensitive Information
The primary advantage of an NNN is that sensitive information about your company remains secure.
This could involve anything like proprietary data, patents, finances, negotiation terms—anything confidential.
Signing an NNN agreement is a method to protect private details from coming out publicly or being used by the manufacturer and their staff members.
2. Build Trust
Having confidentiality when writing and signing agreements between your company and your chosen manufacturing supplier lends trust to these types of negotiations, thereby deterring the possible theft of intellectual property.
You can also use this agreement to detail your expectations for the Chinese manufacturing process, including specifications for quality control and product safety.
3. Avoid Unapproved Subcontracting
Some overseas companies that outsource production to China discover that their manufacturing suppliers rely in turn on layers of subcontractors, without the buyer’s knowledge or approval.
With this contract in place, you can reduce or even eliminate the problems caused by unethical manufacturing suppliers who could steal your IP and pass it to their subcontractors.
A Step-By-Step Guide To Protect Your Intellectual Property in China
Keep a Close Eye on Your Manufacturer
Before working with a manufacturing company in China, it’s always a good idea to do due diligence. You should understand the tier of different suppliers and the transparency of every production stage.
When working with a reputable supplier, you still need to keep a close eye on their company updates by continuous monitoring.
Filing your IP Rights In China
Though you have your IPR registered in your country, you may not be protected by any foreign law or foreign judgments in China. Instead, the Chinese law and the Chinese court protect your right.
For overseas businesses engaging in import-export, they are suggested to file their IP information and register for trademark protection with relative authorities in China.
Sing An NNN Agreement
When partnering with a manufacturing company, make sure you have a well-drafted and properly executed NNN agreement that will help you protect your IP, and provide you with relief if the manufacturer breaches the agreement.
Choose A Reliable Manufacturing Partner
Finding a reliable manufacturer in China can be daunting and time-consuming. Shield Works can be your local manufacturing partner to safeguard your IP and meet your production expectations.
As a British-owned and managed company, Shield Works is committed to protecting every aspect of your IP without excessive costs and time.
Shield Works partners with Innopat, a leading Zhuhai-based IP industry expert, to provide you with clear IP protective manufacturing services in China. In addition, Innopat is a professional patent and trademark agency authorized by the National Intellectual Property Administration of the People’s Republic of China.
We also have our IP Protection flagship facility to conduct activities from manufacturing, and product assembly to quality inspection and warehousing.
In this case, you no longer have to worry about the risk of copy-cat manufacturing. Contact us to diss your project today!
Reasons the China Manufacturing Boom Is Actually Good
China produces over 28% of the world’s manufacturing. Because of the China manufacturing boom, it’s not surprising that China’s gotten the nickname “the world’s factory.”
But why is there an increase in China manufacturing? How can it benefit your business? And how has the COVID-19 pandemic affected global relations?
Read this guide to find out everything you want to know about the China manufacturing market and why it’s actually good for your business.
What’s Driving the China Manufacturing Boom?
There are several factors that contribute to the boom in China manufacturing.
For most people, the lower cost of labor is probably the first factor they’d consider. There are lower wages in China. This makes manufacturing much cheaper.
China is the most populous country in the world. This means there are more workers than jobs. That keeps the cost of labor relatively low.
However, certain provinces have begun enacting more laws to protect workers. This includes installing minimum wages throughout the country.
Manufacturing is still cheaper when outsourced to Chinese factories. But, the cost of production isn’t the only consideration you should take into account.
The Chinese-U.S. Business Ecosystem
Manufacturing isn’t the only part of industrial production one must consider. In fact, there is a large network to consider that includes:
- Suppliers
- Distributors
- Government agencies
- Customers
American companies such as Apple utilize China’s efficient supply chain. This efficiency helps them to keep costs down and margins high.
Most U.S. companies operating in China find it unrealistic economically to complete productions on U.S. soil.
Additionally, business relations remain strong between the U.S. and China. Though political tensions may be high, many businesses feel confident in their Chinese manufacturing relationships.
In fact, this is the most confidence many businesses have felt since the beginning of the COVID-19 pandemic.
Lower Compliance Standards
Product assembly in China does not have to meet certain guidelines American businesses must follow. For example, China is much more relaxed about the following standards:
- Involuntary and child labor
- Health and Safety Guidelines
- Wage laws
- Environmental protection laws
Though labor laws are changing in China, they are still far less strict than in the United States. This helps to save on labor costs.
Chinese factories also save on waste management. This is because environmental protection laws are not strictly enforced.
Savings on Taxes and Duties
In 1985, China enacted the export tax rebate policy. This policy abolished double taxation on exported goods. This was responsible for making Chinese manufacturing much more attractive to potential investors.
Exported goods in China are subject to 0% value-added tax (VAT). That means these products are exempt from VATs.
Chinese products are also exempt from import taxes. This keeps production costs low, which attracts more investors.
International Expansion
China is a massive pillar in the Asian market. The Asian market in general is growing at an extremely rapid rate.
Doing business in China helps to expand your reach to these valuable Asian markets.
These expansions can multiply your company’s business opportunities exponentially. You also streamline your ability to introduce products into markets across Asia, especially Chinese markets.
How Did COVID-19 Affect Chinese Manufacturing?
It’s no surprise that the COVID-19 pandemic affected the boom of Chinese manufacturing. China was, after all, the first country to experience the effects of the pandemic.
It is common practice for Chinese businesses to take a week off for Lunar New Year celebrations. In 2020, this break was extended. This was China’s attempt to stop the spread of COVID.
Unfortunately, like many American businesses, Chinese businesses experienced delays in production. Many workers became sick, slowing down manufacturing.
Additionally, issues in the global supply chain created fear around reliance on outsourced manufacturing. This included Chinese manufacturing.
Chinese Recovery in a Post-COVID Economy
However, Chinese factories continued on. Many of them capitalized on mask production to keep them operating throughout COVID.
Now, it appears that China’s manufacturing is on the come-up. However, since the roughest days of the pandemic, it would appear China has made a full recovery.
How Did the US-China Trade War Affect Chinese Manufacturing?
While in office, US President Donald Trump attempted to decouple the Chinese and US economies. This created a trade war that affected, and still affects, the manufacturing industry.
However, an annual member survey by the American Chamber of Commerce in Shanghai revealed that 92.1% of its members had no plans to leave China.
Even with Trump’s push, leaving Chinese manufacturing was not an attractive prospect to many companies. Most of these companies have revenues above $500 million USD.
How Is China Upgrading Its Manufacturing Industry?
The Chinese government’s goal is to have 30% of its gross domestic product (GDP) come from new industries. So what are they doing to meet this goal?
By 2025, China plans to have strong innovation in its manufacturing industry. They expect to use these innovations to drive high-quality growth.
Some manufacturing innovations China is currently working on include:
- Sharing production facilities
- Sharing tools and equipment amongst facilities
- Making intellectual resources such as designs and development practices public use
Their goal is to use this plan to boost resource allocation. This will help to improve efficiency and drive higher ROIs for business manufacturing in China.
Take Advantage of the Chinese Manufacturing Boom
So, you can see how Chinese manufacturing is a valuable market for American businesses.
The factors driving the China manufacturing boom can help to lower costs and boost your ROIs so that your business sees significant returns. Plus, you can streamline your business for introduction into the up-and-coming Asian markets.
Contact our team if you’re ready to begin manufacturing in China. With Shield Works, you can rest easy knowing you’re making the right choice for your business’s manufacturing needs.
The Future of OEM Manufacturing
COVID-19 affected many people’s lives physically, mentally, emotionally, and financially. This also affected several different businesses, causing them to halt their production. Fortunately, even though the pandemic still lingers, there are many OEM manufacturing companies that can still meet the demands and needs of many customers.
If you’ve ever considered working with an OEM manufacturing company, but you aren’t sure how that relationship will look due to the market’s changing trends, you aren’t alone. Many different companies are turning to OEMs to help with their production needs to keep up with product quality demands. If you want to learn more about OEM companies and how they can benefit your company in today’s changing landscape, continue reading below.
What Is OEM?
An Original Equipment Manufacturer, also known as OEM, is a company that produces and sells parts of a product or products for a particular company. That company then takes those parts of a product or complete product and sells it to their clients. OEMs commonly operate in the computer and auto industries.
An original equipment manufacturer often works directly with a retail company. For example, Lenovo’s computer parts aren’t all manufactured by Lenovo themselves. Instead, Lenovo utilizes a manufacturing company to create their processors.
Examples of OEM
To better explain how an original equipment manufacturer works, let’s use Company D as an example. Company D manufacturers several different versions of a memory card to sell to various computer manufacturers or retailers, like Lenovo or Dell. Those companies are considered value-added resellers who will sell their version of the product to their clients.
OEM vs. Value-Added Reseller
Value-added resellers, also known as VARs, sell products from the OEM, but they also incorporate certain added features before doing so. The two companies benefit from one another because VARs help original equipment manufacturers sell their products.
OEM vs. Aftermarket
While an OEM produces original equipment, an aftermarket manufacturer creates products that are made to look like and work with those of an OEM. To simplify, aftermarket parts or products are not original because different companies manufacture them.
Some of these aftermarket companies are locally based, whereas others are foreign-based. Although these parts are cheaper, they don’t have the same guarantees that an OEM part or product would.
How to Make Aftermarket Parts
As we all know, as time passes and technology advances, well-known auto companies, and technology companies release updated versions of their products. Most auto companies update their vehicles at least once every six years, and phone manufacturing companies change almost every year or two. So what happens to those old models and machines used to create those products?
These companies sell them. Many manufacturers purchase those old molds and models to create similar products to market.
Example of Aftermarket Products
You commonly see aftermarket parts in the auto industry. Auto shops and insurance companies prefer to use aftermarket parts over OEM parts whenever someone gets into an auto accident and needs their vehicle fixed. This is because aftermarket products are cheaper to manufacture and purchase.
Characteristics of an OEM
If you want to know if a company is an original equipment manufacturer, there are a few characteristics to look out for. For example, OEMs sell licenses which means they typically sell their product licenses to the resellers they market to.
Hardware
You can easily purchase hardware off the internet through an OEM or a retail product manufacturer. However, the OEM hardware typically is shipped without cables or adapters necessary for the installation and operation of said hardware.
Software
OEM software isn’t very common, but there are OEM software products. Some of the OEM software products created are versions of Windows productivity software, operating system, and security applications. This licensed software typically does not come with technical support, but it is instead provided with basic documentation and a few logos.
Most of these products are created for specific machines. For example, an OEM Windows system for an HP computer won’t operate the same on Dell or Lenovo. Even more so, that certain software may work for one specific HP model, but it won’t perform the same on other models.
Benefits of Original Equipment Manufacturers
There are several different benefits of using an OEM manufacturers in china. For example, when working with an OEM, you can expect a quick response time because less time is required to identify and produce the parts you need. Most manufacturers you work with like to have their products assembled and sent to you within a timely manner.
Quality
When replacing a part on a machine or a vehicle, you will want to have the utmost confidence that the replacement part is the same, if not better, than what was there before. The only way to secure this confidence is to use an OEM. When using an OEM manufacturing company, they will ensure that your products or parts of a product are created and tested to match your original specification.
Support
When approaching OEM support engineers, you will want to be reassured that those engineers have access to the same engineering team that designed your products or parts. Most, if not all, OEM support engineers do have that access, which will provide you with a wide variety of engineering and technical support. OEM staff members are pretty knowledgeable, and they can help you with all your part needs.
Value and Lifespan
When replacing parts in your products or machines, you expect that you will continue to get the same performance you had before needing the replacement. Buying from an OEM manufacturing company ensures that your replacement part will have that same quality, and there will be no degradation in performance.
Warranty
Having a warranty is one of the most important benefits when working with any OEM manufacturer. Should your company receive your parts with any defects, or if the parts are faulty, you can always reach out to your OEM. They will make sure to make it right so that you aren’t stuck with unusable products.
High Return on Investments
Since the parts your OEM supplies are designed to perform and fit factory specifications, these parts increase the life of your product. In the long run, this can save your business a lot of money and help reduce downtime.
Current OEM Trends
The relationship between OEM companies, dealerships, and other companies has always been healthy and symbiotic. Most OEMs depend on their networks to sell and service their products.
On the other hand, these companies have fallen back on OEMs to provide specific components or parts. In the auto industry, original equipment manufacturers also have the task of financing their servicing activities while the cars are covered under warranty.
Updates to the Market
Most OEM companies are now working towards creating remote software upgrades and establishing direct relationships with their clients with subscription models. With that said, this means that OEMs are taking ownership of customer relations which usually falls back on the dealers, or as you now know, VARs.
The dealers still get a significant portion of profits from after-sales and services. Activities like new car sales or new product sales can also create a profit, but the margin is relatively small.
What Does This Changing Landscape Mean?
Consumer demands of the auto industry are changing. Apart from the shift in needing or wanting more electric vehicles, cars are now viewed as a part of a shared mobility service. Models of car ownership are changing as well, meaning that customers now view their cars like smartphones. These clients expect their vehicles to be updated and refuse to pay a premium for a service that offers benefits down the line.
OEMs are currently working on creating capabilities that reduce cost due to connected diagnostics, predictive maintenance, and over-the-air software updates. They are also seizing more opportunities for direct relationships with consumers, such as creating innovative techniques to sell cars.
Customer Trends and the Marketplace
As technology continues to advance and the way we work and live continues to change, customers are doing things more online. To support dealerships, OEM manufacturing companies have to consider the value they add.
As mentioned earlier, OEMs are set to take greater ownership of customer relationships, but they should provide additional support to dealerships to ensure they don’t just disappear altogether.
To help with this, OEMs can incentivize dealerships to drive traffic to online showrooms, or they can reward dealerships for high brand engagement.
How to Find an OEM Manufacturer
When looking for an OEM, you will want to ensure that they have experience making products similar to yours. For example, an OEM who specializes in computer parts may not have the same capabilities for creating auto parts. You also must consider if you want to use a factory in the United States or overseas. Most OEMs who have better capabilities are overseas, not in the United States.
Domestic vs. Overseas
Manufacturing in the United States has its benefits, but it also comes with a few disadvantages. With an OEM in the U.S., you have more control over production; you can also visit the site regularly and avoid dealing with international shipping logistics.
Although that may sound ideal, you will most likely have to pay more for parts and labor. With overseas manufacturing, you still have a say in your product specification, but the cost to the manufacturer is much cheaper.
Even though dealing with international shipping logistics may sound like a headache, it won’t be when you partner with the right company. They will make sure to have a dedicated contact who can speak your language and explain the entire process to you.
Review Their Certifications
Not all manufacturers in China are the same, nor do they have the same qualifications. No matter how well-established the plant is, there is a possibility that they don’t have the necessary licenses or certifications.
To ensure that your manufacturer creates your product in compliance with regulatory standards, make sure that your supplier has the proper licenses and certifications to assemble your product.
Common ISO certifications manufacturers should have:
- ISO 14001: Environmental Management
- ISO 9001:2015: Quality Management Systems
- ISO 45001:2015: Occupational Health and Safety
Each industry has its own certifications, so each manufacturer needs to have the same certificates and documents to ensure they produce high-quality products. Before working with a specific manufacturer, make sure that you check the required materials for assembling.
Capacity
The last thing you want is to work with a manufacturer who doesn’t have the capacity to manufacture your parts or products. You wouldn’t want to send your money and products to a company just for your products to be stuck on a shelf awaiting their assembly.
To ensure that you don’t get stuck with a company that doesn’t assemble or manufacture your products as fast as you need, make sure you check in with your manufacturer’s production space. The OEM should provide you with information about their current output rate and deadlines.
Produce High-Quality Products
Partnering with a reputable OEM manufacturing company is critical to make sure that your business meets the demands of your clients and ensures long-lasting performance and high-quality products. Working with a reputable OEM manufacturing company is more than just finding someone reputable and knowledgeable; it is about creating a stable relationship.
You want to make sure that the company you work with values you and your business just as you do. Contact us now if you are ready to create a lasting relationship with an OEM manufacturing company overseas. Our team is prepared to answer any questions or concerns you have about our future partnership.
Made in China: The Process of Product Assembly
Assembly lines began back in the 19th century in meatpacking factories. The famous Henry Ford used this idea as a solution to produce his widely known automobiles. Ford realized the benefits of a product assembly line as it decreased his costs dramatically, to both his own products and those of Ford customers.
As the demand for eCommerce grows, more companies are selling their products online. These products are being sold and then shipped from an external warehouse where products are assembled in massive quantities.
Keep reading to learn more about the process of product assembly, its benefits and challenges, and how China has become the greatest manufacturing superpower.
What Is Product Assembly?
Product assembly is the process of creating products in sequential steps. Each step has its own materials to put together in specific ways. All leading up to the final product.
This process was originally set up like a regular assembly line. It involves a number of workers standing in a line of some sort by a specific machine or piece of equipment. In some cases, they are sitting at a workbench with their own set of materials and tools.
Product Assembly Methods
You may recognize the classic assembly line as a large industrial-type room filled with different work stations or product lines. The workers are either sewing clothing, piecing together a television, and others.
The process of product assembly boosted the production of goods and manufacturing. This massively increased efficiency and decreased the amount of time it took to produce large quantities of products.
The higher the quality and the greater the availability of technology in modern times, the greater the need for a smooth process for businesses. There is also the perfecting of operations and mass manufacturing of products.
These manufacturing plants and warehouses involve a lot of detailed operations, management, and technicians to ensure the regular flow of systems. It becomes an entire business operation in itself and requires proper function.
Classic
The classic assembly lines using factory workers are still very much in place. However, switching to using large factories with heavy machinery has become more popular for big players in the field.
Automated
Through automated processes, different machines or large pieces of equipment are used to put a product together piece by piece at different stages. This was done to create an end product with great speed and efficiency.
Which Product Assembly Method Do I Need?
Depending on your product, the method of product assembly will differ. For example, there will be no need for something like weld assembly if your product is clothing. Ask yourself, is it large and complex needing automated product assembly or can it be done with a classic assembly line?
Also, is your product one that is shipped out fully assembled, or is it completed elsewhere? This refers to things like furniture that’s shipped to a storefront in pieces versus an automobile that you don’t expect a customer to complete themselves.
With product assembly, millions of products and goods are shipped across the globe daily. It has provided hundreds of thousands, if not millions, of factory jobs.
Assembly lines have grown to include large factories across the world, with the most manufacturing being done in China.
Product Assembly in China
China has perfected the product assembly line through decades of practice. They are trusted as the top manufacturing nation in the world for many reasons.
There is no requirement to employ highly-skilled workers. Unless it’s an engineered product, factories can usually hire many more people at low costs. It’s great for the plant as more workers means more hires and increased productivity and goods production.
China has also optimized on factories or manufacturing plants being concentrated to one industry. What this means is that textiles will be produced in one area and electronic parts in another. These are generally referred to as production clusters.
This process results in streamlined manufacturing for more goods in one place. It has really put China above the rest of the world when it comes to production.
What You Need to Know When Choosing to Produce in China
The most important thing to consider is to figure out what type of assembly is required based on your product. Are you looking to manufacture textiles? Is there a need for engineers in your assembly line, or do the steps require low capacity?
The process of the product assembly itself depends on the operations of the plant. This can also involve what type of product you have and which method of assembly you choose.
Is it line assembly where workers are assigned to each step in the process, whether it be quality testing at the end or checking for issues from the start? Your warehouse might have an inspection line in itself.
It’s important to think about production times. Take into consideration the product, type of assembly, and how these two can affect each other.
Research
Of course, for businesses, there is a lot of legal paperwork involved in selecting a product manufacturing plant in China. Additionally, agreements need to be made before any production begins and plans are finalized.
To ensure you choose the best option for you, be sure to research different manufacturing warehouses in China. Research can be done through looking through all their social media (if available). This will give you a sense of their following and their level of popularity in the community.
Another great way to do research would be by looking up company reviews. Do they have a lot of happy customers? Do they have long-lasting business relationships or testimonies? You can also research any news about the company.
Tour the Space
As a business owner about to invest in a manufacturing plant, there are structural and operational things to look out for too. Check the condition of their warehouse in terms of cleanliness, safety protocols, and more. Look at the size of the space and check out the quality. Given the current travel restrictions in China, it is unrealistic for many businesses oversea to physically pay a visit. Hire a qualified 3rd-party QC agent to perform factory audits for you.
If you notice some equipment is broken or sitting unattended ask questions. Be prepared to ask about how they operate. Do they only hire skilled workers, or are they open to having different skill levels of staff? Remember this might not be as important depending on your product.
Have a Trusted Source
Contracts should be laid out with every detail included to cover any possible scenario that could halt production such as delays. There need to be planned solutions for issues with unmet timelines or quality expectations.
Meet with your manufacturers before you make a choice. If you can, visit the warehouse or plant location to have a look for yourself. If not, you should have a liaison in China who can do this for you. A trusted resource to communicate issues and updates to you is beneficial.
The Benefits of Product Assembly in China
Over time, the quality of outsourced production has increased with more and more North American companies using warehouses in China for several reasons.
Production in China has much lower costs for higher reward. The cost of labor is lower so more employees can be hired. The production level is massive so products can be ready quicker resulting in more purchases.
There is no need to track down a manufacturing plant because they are so readily available in China. They are usually already operating for other companies as well. This removes the need for a business to build one themselves, which would require hiring your own staff and paying for your own space.
Choosing a China assembly service for manufacturing jumpstarts the process of product production. This means a quicker start to making revenue.
The Challenges of Product Assembly in China
With the efficiency and ready-to-go structure of a manufacturing space in China, there are some challenges.
There will be a need to have someone on your team to oversee general factory setbacks that may occur. Because you aren’t able to just drive over in an emergency, it would be good to have a contact who lives in that country. This could be the owner of the plant itself.
Communication is Key
It’s important to keep communication smooth, open, and at a steady pace. There could be things lost in translation or miscommunications that can cause very big problems. Imagine asking to change a part in assembly and it happens to be the wrong one?
Also related to communication, there could be massive time differences between your country and China. This can make it difficult to have regular communication. It could make it tough to have a good relationship with the manufacturer.
Depending on where you reside, China is across the world and in an entirely different country. This can make you feel very disconnected by the inability to be on-site regularly.
Ensuring your supplier of parts and materials are also openly communicating is crucial. This refers to communicating with the business owner and with the manufacturing plant. Issues can arise if parts aren’t being sent on time or are incorrect or missing.
Remember that some companies can be committing fraud. Keep an eye out for fake websites, no contact information, no reviews, or a location. There have been cases of companies accepting deposits or a related hold and backing out without contact.
Additional Challenges
In terms of shipping times, they will increase dramatically when your products are being outsourced from China. Standard shipping can take up to two weeks.
Take into consideration that production is so vast in China that it sometimes negatively affects the environment. The levels of air pollution from factories has only increased over the last few decades. But efforts have also been made to improve the air quality and the improvement is significant as well.
There is also the challenge of a lack of resources from the massive production in China. The availability of resources and materials in China to produce goods across these warehouses has dwindled.
In 2018, President Trump also enacted an increase in taxes on imports from China. This caused a riff in the relationship between production in China from US-based companies. Some actually moved their production out of China as a result.
The Future of Product Assembly in China
China has plans in place to continue holding its spot as the largest production superpower in the world for many years to come. With the growth of intelligent technologies and a never-ending need for low-cost manufacturing, this seems very likely.
There has even been discussion around using data from manufacturing plants to understand customer product needs. This can increase happy customers and thus potential revenue for businesses worldwide.
Contract manufacturing in China is on the rise. Think about how many products you buy that are ‘made in China.’ It’s no surprise that companies outsource their business in this country. The benefits certainly outweigh the cons outlined in this article.
Get a Consultation
Based in the UK, Shield Works has 16 years of experience outsourcing product development in China and product assembly on-site, fostering long-term relationships with their clients.
Its founders and leaders are experts in the field of manufacturing with direct connections and communication with China as partners of their business sphere. They have worked to assist both large and small businesses through the process of finding the best manufacturing facilities in China, while also supporting manufacturing in-house.
If you are interested in product assembly services in China, connect with our professionals in the product assembly and product manufacturing field for assistance. If you are manufacturing in-house and looking for a new space, we can help with that too.
The Power of Contract Manufacturing: How It Can Drive Down Costs and Increase Flexibility
The contract manufacturing industry is thriving globally due to its ability to drive the immense reduction in the cost of manufacturing goods and to grant companies increased flexibility faster than traditional methods.
In this article, we’ll take you through the primary reasons why contract manufacturing can deliver improved cost performance and production flexibility.
Reduce Labor Costs
Labor cost is a key element in the manufacturing industry. Typically, the labor is more expensive when you are from the developed world. So it makes more sense to outsource your production to China.
Depending on how far along you are in manufacturing your product, you may be paying upwards of 50-70% for labor costs.
When shifting to contract manufacturing, it’s typical to see those costs reduce by 30-50%. While lower costs aren’t guaranteed, there’s plenty of room for negotiation based on your volume requirements.
In some cases, companies have been able to negotiate down as much as 80% of their original labor costs. This is a massive saving that can help you create a more profitable business model from day one.
Reduced Capital Requirements
If you’re not ready to invest in building an in-house engineering team and buying expensive equipment, contract manufacturing is the best option to help you get a product to market with minimal risk.
You simply pay for services as needed rather than extra investment, otherwise, that will be a waste of having a facility with equipment that sits idle most of the time.
Some manufacturers may even let you use their machinery at fairly lower prices if you hold an order of larger quantities or have a good relationship with them.
Typically, a professional contract manufacturing company focuses more on improving efficiency. They have a pool of in-house specialized engineers because a company’s production efficiency obviously cannot be improved overnight.
Increase Inventory Flexibility
Since you are not tied to a specific factory, you can switch manufacturing plants at any time without having to change production plans. This gives you increased flexibility for where and when you buy raw materials as well as components needed for your product. In this case, you will never be stuck with too much or too little inventory if you have contract manufacturing.
Meanwhile, when you work with contract manufacturers, they handle all aspects of manufacturing including procurement and logistics.
The cost savings associated with using a third-party supplier is passed on to you in terms of lower prices. In addition, because these companies specialize in one aspect of manufacturing (such as PCB assembly), they do it better than anyone else in their field which means they can offer better quality products at competitive prices.
Increase Manufacturing Experience
If you choose a professional contract manufacturer who is specialized in what they do, you will be worry-free in many situations.
The most important one is that they usually have a customized plan for you to meet your needs in production, quality standards and lead time. It will be easier and more effective to get your project done.
The other excellent experience for you if you have a professional contract manufacturing firm is that they have one-stop supply chain services to deal with from sourcing, quality control, warehousing and shipping. With these services, you can save your time and money in finding other third-party companies for your business.
Manufacturing In China With Confidence
Contract manufacturing is only becoming more prevalent as time goes on. When your company needs contract manufacturing services, come to Shield Works. We take care of every aspect for you, so you can focus on innovation and launching products as quickly as possible.
With our well-established facility based in Zhuhai, Guangdong Province, we offer a range of services to accommodate your needs, from a one-time contract manufacturing and precision assembly to warehousing and fulfilment, without ever worrying about inventory or quality control. Our production process is streamlined, efficient, and optimized – so no matter what phase your business is in, we can take care of you.
We pride ourselves on excellent customer service and British background management experience. Contact us to find out how we can help with your project!
5 Qualities to Look for in a China Manufacturing Partner
Finding the right manufacturing partner can be tricky, especially if you’re new to China manufacturing or just starting out with your business.
There are plenty of quality manufacturers out there, but it’s important to make sure that they have these 5 qualities before you enter into an agreement with them.
Only then will you know you can trust them and put your business in their hands without having to worry about things getting messed up along the way.
1) Knowledge
When you partner with a manufacturer, they’ll act as your vendor or factory.
This can be intimidating when you’re not sure what questions to ask or how much to spend.
A good China manufacturing partner will have knowledge of both manufacturing and international business and can help determine which factory or vendor is right for your product.
It’s important that your manufacturing partner understands what your product is, where it comes from and how it’s made—otherwise, how can he/she help you?
Skilled manufacturing partners are invaluable when it comes to navigating things like quality assurance, intellectual property protection and shipping logistics; manufacturers with specific knowledge will know exactly what questions you should be asking.
2) Transparency
If you have questions, or something goes wrong with your order, it’s nice to know that your manufacturer is open and honest about what happened.
It’s no good if you don’t get your calls returned or emails responded to quickly and thoroughly.
If you need a manufacturer who will constantly track and ensure they are producing quality products, make sure you ask around and do research before settling on one.
Chinese business culture can be complex and difficult for outsiders to navigate.
If you plan on doing business in Asia at some point, it’s a good idea to find someone who knows their way around and won’t hide how they do business from you.
3) Language
Communication is key with your new manufacturer.
Be sure you speak the same language.
If there’s a language barrier, it will make working together much more difficult and might lead to frustrations on both sides.
Make sure you clearly understand what your manufacturer will do—and won’t do—for you before signing any contracts or paying any fees.
You should be able to get an idea of their working style just by talking on Skype or even emailing back and forth for several weeks. (If they get upset easily when dealing with customers, it might not be worth continuing.)
If communication doesn’t go well at first, consider ending your relationship early rather than suffering through something that could eventually lead to problems down the road.
If you need much more timely response, you can also use WeChat, an IM chat app most Chinese use.
4) Dependability
Many manufacturers offer low-cost goods and services.
Although it might be tempting to use one of these companies, it’s important that you remember that you are paying for more than just products.
Quality customer service can be lacking from low-cost companies; you’ll want to work with an manufacturer who makes you feel comfortable and is always willing to answer questions.
This can help build a relationship of trust between your company and your manufacturer, which will be beneficial throughout your business venture.
On top of that, having direct access to someone at your manufacturer’s facility will make communication easier as you enter into negotiations
5) Personal Relationship
You might think that saving some money is good enough of a reason to choose a manufacturer solely based on price, but keep in mind that it’s much easier and more enjoyable to work with someone you already know.
You’ll get more out of your partnership if you feel like there’s trust and camaraderie on both sides.
Plus, buying in bulk will allow you to negotiate better prices than if you were working alone.
Your personal relationship should be one that allows communication channels open at all times.
This can also be a reflection of his/her relationship with suppliers.
In China, especially when it comes to dealing with factories, maintaining guanxi(relationship) is extra important.
It can make direct impact on how your order will be made.
Shield Works has over 16 years of manufacturing experience in China. Feel free to let us know if interested!
The Benefits of Using a Contract Manufacturer
Manufacturing continues to grow throughout the years and has become incredibly profitable. Did you know that manufacturers contribute about $2.71 trillion each year?
If you’re thinking about using a contract manufacturer, you might wonder if it’s worth it. There are several benefits to using one, and some might surprise you! Read this guide on the various benefits of using a contract manufacturer today.
Keep Costs Low
Contract manufacturing is a great way to reduce the cost of your services and products. This is because there’s a lower chance of errors. You can also benefit from bulk purchasing and skilled labor.
All of this can lead to satisfied customers since you can lower the cost of goods. Manufacturing businesses specialize in high-volume production lines and cutting costs.
This means that you can focus on running your business instead of worrying about production or making errors. Many companies are experts in their field and what they sell, but they struggle with the production process. That’s where a contract manufacturer comes in.
Save Money
Did you know that manufacturing accounts for 12% of the U.S. economy? You’ll be able to save money since you won’t have to worry about buying equipment for production. Skilled laborers will already have the equipment that you need.
If a product is high in demand, a manufacturer can focus on decreasing the time that it’ll take.
Test Products
You can test products before they’re in the hands of your customers. This is a great way to save money by not producing a defective design.
Determine what the needs of your business are since each manufacturing company could offer different services. They can also make changes to the product as necessary.
They can improve the products, increase the production rate, and give you great profit margins.
Professionalism
Product manufacturing companies will provide you with products without errors. This will help the reputation of your company.
Some companies will try to do production on their own and then make a grave error. Let a manufacturer perform production and watch your production rates increase.
They can also bring fresh, new ideas to your products. Manufacturers are experts in design and can help your product shine.
Improved Efficiency
Many manufacturers learn how to reduce waste. They can perform various tasks such as painting, machining, difficult assembly, welding, etc. This can help reduce the manufacturing costs for your company.
Manufacturing companies can also provide you with more flexibility. Whether you’re looking to scale production, develop products at the same time, etc.
You can start and schedule projects when it makes the most sense for your business. You’ll also know that they’re using the top-of-the-line equipment in the company to provide you with high-quality products.
Save Resources
Since they’re knowledgeable about reducing waste, you can lessen your carbon footprint. This also means fewer costs for you.
Your staff will have more time to work on business tasks. You can focus on your business, marketing, etc.
If you wanted to do production yourself, you’d need to hire a large staff. This could include operators, engineers, managers, etc.
Whereas contract manufacturers already have their staff in place. You’ll have a large team working on your products without having to worry about shifts, payroll, or hiring workers.
Sell Your Products Sooner
Since managers can create your products fast, you can get your products out there to the consumers quicker. There are different methods such as CNC machining and Rapid prototyping that can help speed up the process.
You might be able to get your products out there in a few weeks!
Various Options
They can handle various aspects of the manufacturing process. These can include material purchases, product design for manufacturing, assembly, packaging, etc.
Since everything is happening under one roof, it reduces costs for you. They’ll handle the difficult parts of the manufacturing process so you as a business owner can have less stress.
Deadlines and Estimates
You’ll know in advance how much to budget for the process. They’ll provide you with a detailed estimate before they begin.
This will make it less likely that you’ll experience delays or unexpected costs. They’ll also be able to tell you how long it should take.
Improved Communication
If you try to have the product manufacturing process internally, you’ll need to contact multiple vendors at all times. Through contract manufacturing, you’ll be able to stay in communication with them. You won’t have to worry about a response.
Who Can Benefit From Manufacturing Contract Companies?
Most businesses can benefit from contract manufacturers. You might decide to use product assembly services in China since it’ll save your business money. Keep in mind that how skilled a manufacturer is will vary.
Some ways they can help include:
- Packaging products
- Manufacturing products manually
- Product assembly
- Creating computer models of products
- And more
When you’re first starting out with a production company, it’s a good idea to test out a contract manufacturer. See how their production process is and if it slows you down. You might find that you’ll have more time to focus on your business and productivity will increase overall.
Understanding the Benefits of a Contract Manufacturer
After exploring this guide, you should have a better idea of the benefits of a contract manufacturer. Take your time deciding if it’s right for your business.
Are you ready to speed up the process of manufacturing in your business?
Contact us today! We offer customized manufacturing, including developing new processes, using top-notch equipment, and customizing work procedures.