Know Your Business Before Looking to China
November 10, 2017
When you first consider manufacturing in China it can be tempting to dive straight into comparisons between factories. At China Performance Group, we know it is the businesses that know their own operations back-to-front that have the most success moving their production off-shore. To increase your chances of success, take a minute to consider these four aspects of your own operations.
The pros and cons of your current supply chain
How many components does your product have? How many stages does it pass through before it reaches your consumer? Can your entire product, including packaging, be made in one location?
If your product contains multiple, generalized components, you may find it easier to source in China. This is because you can develop a process by which the factories coordinate to arrange the delivery of components to each other. If your product contains specialized, custom or handmade elements, especially in small numbers, you may be better off producing domestically.
Your manufacturing ‘story’ and how it relates to your brand
In a market where consumers have a relationship with your product long before it hits the shelves, the origins of your product form an integral part of your brand. How does your choice of manufacturer influence your branding?
While China used to be synonymous with large scale production, brands such as Everlane demonstrate that it is increasingly possible to create a brand that promotes small-scale production and sustainability while manufacturing in China.
Consider how important the manufacturer is to your overall brand, and select accordingly.
The complexity and flexibility of your designs
Many businesses make the mistake of developing designs for a product without finding out if they can be easily produced. In most cases, designers need to work with the manufacturer to tweak the designs before the products can be made.
Another factor is how versatile you need to be. Will your product design stay the same for 6 months or more? Or will you need to make changes every two weeks?
Do you have an in-house design team that will work side-by-side with your manufacturer? Or, will you be reliant on your manufacturer to make any necessary changes? Determining how ‘hands-on’ you want to be with your manufacturer will help you make a determination as to which manufacturer you chose.
Projected sales and product turnover
How comprehensive is your inventory forecasting?
If your product were to sell out tomorrow, how soon would you need a new delivery? How many widgets do you expect to sell next week? Next month? Next year? Manufacturing in China means longer lead times, which can be difficult – and expensive – to manage when you need an extra shipment to fulfill unexpected orders.
If you have a business where you are able to make clear sales projections, you will find it easier to manufacture in China as you can minimize your ‘unknowns’ and accept longer lead times for lower prices.
Shining the light on your own operations makes it easier to decide what you need in a manufacturing partner. Still unsure? Contact us and let us help you find the right manufacturer to grow your business.
By Laura O’Loughlin