Basic Strategies on Global Sourcing
- By Hendrik Pohl
- Published 10/1/2009
- Fulfillment
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Whether you are manufacturing your product down the street, or across the world, the 6 principles below will be helpful in ensuring your order is produced at the level of quality you need. Consumers are now well aware of the potential pitfalls when companies go chasing low costs without adequate attention or know-how to deliver quality. But for every cautionary tale we hear, there are stories of success in which companies do the right thing and drive growth and profitability through their supply chains.
Most, if not all of the points, involve good communication and diligent project management. It should be noted that these steps need to be taken together. Accomplishing one or a few of them will not suffice to assure your product quality, and will likely only delude you into a false a security about what is coming off the production line and potentially making its way into the hands of your customers.
1) Source the right manufacturing partner: Just like there are good restaurants and bad restaurants in every town across the country, there are good factories and bad factories offering their services across the world. Thus, to ensure supplier sourcing sets the other 6 steps up for success, one would do well to locate several potential sources, receive manufacturing and cost feedback from each of them, and select one or two that seem best able to support the project's and company's needs based on qualifications, engineering and QC support, product lines, and customer service. Assessing a supplier for these qualities will likely, and should, involve auditing the factory production line, as well as meeting with management and key personnel. Do this--and the rest will be much easier.
This point comes first, not only because the sourcing process takes place before any of these other steps are taken, but because working with the wrong China factory, or any factory for that matter, will make these other steps very difficult to accomplish and/or ineffective. It's similar to following all of the cooking instructions with great meticulousness to bake a world-class cake, and then baking your cake in a rusty, old oven.
2) Strong documentation: Having very detailed, specific, bilingual, a
greed-upon documentation which clearly defines your product, how it is to be produced, and the QC (quality control) standards is essential in eliminating confusion from the very start. Without this, it becomes difficult to find someone at fault for what was not apparent to them. In addition, your contract or purchase order should clearly specify what is expected from and to be delivered by both parties. When things go wrong, the contracts come out. Make sure you're covered.
3) Factory Visits: As mentioned in the first point, It's necessary that you or a 3rd party you trust visit the factory. Having a presence there helps identify, communicate, and resolve problems quickly. It also displays a high level of dedication to your operations--and the factory sees that.
4) QC Inspections: All orders MUST be inspected by you or a 3rd party post-production, but prior to leaving the factory. It is fine to trust the promises and assurances of the factory management and staff, but you must verify their claims as well. This must be done before the goods leave the factory because if you do catch something that does not meet your criteria, you are in a good position to negotiate what will take place next.
5) Product Development w/Approved Samples: As you proceed through the product development process with your vendor, during which they are creating samples of your product for your review and approval, the approved samples should be kept by both you and the factory. An approved sample signifies that both you and your manufacturer agree on what is going to be produced, and gives you a point of reference to compare the final products too.
6) Accountability: Everyone makes mistakes and sometimes your manufacturer will be right and you will be wrong. Know when to take responsibility for the errors you've made, such as poorly communicated information or information you forgot to include, as nothing will destroy credibility in a hard-earned, valuable relationship as refusing to admit one's own mistakes. Though warm and fuzzy topics, communication and trust are often cited as a best practice by industry professionals that yield unmeasurable value.
These guidelines can be extrapolated to any service-provider relationship, but when dealing with the production of physical products, the successes and failures of implementation are so easily apparent and important.
Most, if not all of the points, involve good communication and diligent project management. It should be noted that these steps need to be taken together. Accomplishing one or a few of them will not suffice to assure your product quality, and will likely only delude you into a false a security about what is coming off the production line and potentially making its way into the hands of your customers.
1) Source the right manufacturing partner: Just like there are good restaurants and bad restaurants in every town across the country, there are good factories and bad factories offering their services across the world. Thus, to ensure supplier sourcing sets the other 6 steps up for success, one would do well to locate several potential sources, receive manufacturing and cost feedback from each of them, and select one or two that seem best able to support the project's and company's needs based on qualifications, engineering and QC support, product lines, and customer service. Assessing a supplier for these qualities will likely, and should, involve auditing the factory production line, as well as meeting with management and key personnel. Do this--and the rest will be much easier.
This point comes first, not only because the sourcing process takes place before any of these other steps are taken, but because working with the wrong China factory, or any factory for that matter, will make these other steps very difficult to accomplish and/or ineffective. It's similar to following all of the cooking instructions with great meticulousness to bake a world-class cake, and then baking your cake in a rusty, old oven.
2) Strong documentation: Having very detailed, specific, bilingual, a
3) Factory Visits: As mentioned in the first point, It's necessary that you or a 3rd party you trust visit the factory. Having a presence there helps identify, communicate, and resolve problems quickly. It also displays a high level of dedication to your operations--and the factory sees that.
4) QC Inspections: All orders MUST be inspected by you or a 3rd party post-production, but prior to leaving the factory. It is fine to trust the promises and assurances of the factory management and staff, but you must verify their claims as well. This must be done before the goods leave the factory because if you do catch something that does not meet your criteria, you are in a good position to negotiate what will take place next.
5) Product Development w/Approved Samples: As you proceed through the product development process with your vendor, during which they are creating samples of your product for your review and approval, the approved samples should be kept by both you and the factory. An approved sample signifies that both you and your manufacturer agree on what is going to be produced, and gives you a point of reference to compare the final products too.
6) Accountability: Everyone makes mistakes and sometimes your manufacturer will be right and you will be wrong. Know when to take responsibility for the errors you've made, such as poorly communicated information or information you forgot to include, as nothing will destroy credibility in a hard-earned, valuable relationship as refusing to admit one's own mistakes. Though warm and fuzzy topics, communication and trust are often cited as a best practice by industry professionals that yield unmeasurable value.
These guidelines can be extrapolated to any service-provider relationship, but when dealing with the production of physical products, the successes and failures of implementation are so easily apparent and important.
Hendrik Pohl
Pohl has lots of experience with sourcing overseas. He also suggests that you have a look at the following article written by global sourcing specialist Ashton Udall on Sourcing Innovation
View all articles by Hendrik Pohl