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China Law Blog China Law for Business

How to Succeed At China Manufacturing.

Posted in China Business, Recommended Reading

David Dayton over at the Silk Road International Blog did an excellent post on China manufacturing a couple years ago, but I just saw it today. The post is entitled, “What to ask for at a trade-show (and afterwards too),” and it starts off with Dayton saying that he is writing the post because he is always getting asked what to look at for at trade-shows.  The post is full of excellent advice, some of which I highlight below.

Dayton starts by listing “First questions” to ask of manufacturers you meet at a trade-show and are considering using.  A select portion of those questions are below, along with my comments in italics:

  • Where is the facility and can you go to visit (this week while you’re in the country)?  Visiting the facility may be the single best thing you can do to determine whether you are going to be dealing with a high quality Chinese manufacturer and, on top of that, I am convinced that just visiting increases your chances of being taken seriously by your manufacturer, which in turn, increases your chances of getting good product.  
  • Do they have business documents that they’ll let you see?  I am not sure exactly to what business documents Dayton is referring, but generally it is a good idea to, at minimum, make sure that the company you are dealing with is actually registered in China and is truly the same company that makes your product.  It also never hurts to see documents showing that your potential manufacturer has done this before. American companies tend to be reluctant to ask for this sort of thing, but you should know that Chinese companies are not.  Just asking for these documents will separate you out from many others and thereby earn you increased respect, which definitely can impact product quality. 
  • Will they let you talk with engineers and other managers?  If they will not allow this, you should be suspicious. 
  • Will they allow 3PQ?  If they will not, you should be suspicious.
  • Can they give you referrals?  Note that Chinese manufacturers sometimes refuse this request for valid reasons.
  • Can you meet and even QC sub-suppliers?  If your Chinese manufacturer is going to keep the identities of its sub-suppliers a secret, your odds of quality control problems just went up. 
  • How do they deal with non-conforming product?  Not sure if I agree with this one as we are of the view that our clients should be telling the Chinese manufacturer how to deal with non-conforming product.  Generally, we seek a refund of any amounts paid, along with the destruction of all of the non-conforming product.  

Dayton goes on to point out that even once you have found a “great factory,” you still have to determine whether it is a good fit for you.  He proposes asking the following excellent questions to find out:

  1. What is their average order qty?  Is your order similar?
  2. What is their average order time?  Is your lead time sufficient?
  3. Have they done similar projects (similar levels of customization, similar components)?
  4. Can you communicate with them effectively and do you feel comfortable working with them?

Lastly, Dayton lists out what Western companies need to do on “their end of the deal”:

  1. Always keep you word concerning dates and monies and anything else that is your responsibility.  Check.  
  2. Always take into account the reality that if you’re late with art (or money or answers) it will cause production delays (usually longer than your delay).  Check
  3. There will be problems, so take notes and keep records and follow up on anything that you’re not clear on.  Check.
  4. NEVER MAKE ANY ASSUMPTIONS.  Double-check.  For more on this, check out China Legal Issues For Business. The Ten Minute Version.
  5. Never make any changes to your specs or to your contract.  I disagree with this one, so long as the changes are handled appropriately.  
  6. File all legal work in your home country and in China BEFORE you start passing out specs to anyone (even at the show).  I think what David is saying here is that you need to make sure that all your intellectual property protections are in place BEFORE you start flashing around your IP.  For more on this, check out Register Your China Trademark Now. Then Register It Again With Customs.
  7. Spec out all your details and present them in a consistent and clear format.  Check.
  8. Meet FACE TO FACE with your factory as much as possible.  Check.
  9. Admit when problems are your fault and take responsibility for them.  Check.
  10. There will always be problems—usually you can work through them.   But always find a back up facility just in case.  Check
David’s post has many more tips for those looking to manufacture product in China and for those already manufacturing product in China and if you fit either of those two categories, I strongly urge you to check it out.
What do you think?
  • China Newz

    It seems like covering all of these areas will definitely help you judge a potential manufacturer well. With the language barrier, it must be so complex assessing all of this. Know that most international trade is done in English, but the cultural and language barriers must make business people jittery to say the least. Great pointers.