China Law Blog

The China Business And Travel Blog has a post with some excellent tips on dealing with your China vendor. Entitled, "Vendor Evaluation (or You Can't Know Everything)," the post details a crisis in which the blogger, Blake, finds himself and then ends with what he has learned from the experience:

Have a vendor management program and follow it. Even if informal, you should periodically re-audit, and track vendor performance.

Dual source when possible. Due to complexity and volume, I couldn't practically dual source this part.

Keep a list of qualified alternates in case you need to move quickly, and never stop hunting for new and better vendors. Does this mean don't build relationships with vendors? Absolutely not!!

Just be prepared to move if things get bad -- I have a good relationship with this vendor, but not so good he's going to repay me for the money I'm going to lose!

Don't be lazy!! If things start to smell bad, they're bad! I knew this company was starting to have troubles, it's just that it took so long to get this part qualified, and....

Know who owns your moulds, if applicable, and don't be afraid to move them. Fortunately, I do own these moulds, and can move them to a new vendor.

I will add one thing on the subject of moulds (a/k/a molds). If you are going to have your OEM manufacturer in China build your moulds or if you are going to take your moulds over to your OEM manufacturer, you must be sure to get a written and signed contract (preferably in Chinese) saying that the moulds belong to you. In our experience, it is relatively easy to get your moulds back when you have such a contract and bordering on impossible when you do not.