360° Coverage : Manufacturing In China Can Give Your Business The Competitive...

2 Updates
Manufacturing In China Can Give Your Business The Competitive Advantage

Manufacturing In China Can Give Your Business The Competitive Advantage

Feb 7 2014, 5:14pm CST | by

By Michael Evans and Jack Toolan When China opened itself up to the world twenty years ago, many realized how its huge market of almost 1.3 billion consumers could impact the biggest manufacturers...

Filed under: news

 
 
 

37 weeks ago

Manufacturing In China Can Give Your Business The Competitive Advantage

Feb 7 2014, 5:14pm CST | by

By Michael Evans and Jack Toolan

When China opened itself up to the world twenty years ago, many realized how its huge market of almost 1.3 billion consumers could impact the biggest manufacturers and retailers in the world. Few anticipated, however, that China’s large population base would also provide competitive advantages against the most dominant players in the outsourcing industry.

China’s current outsourcing market is growing an estimated 30 percent annually, and many countries have relocated their headquarters to China to establish businesses. Manufacturing in China opens a world of possibility to create a wide range of products and innovations. In addition, bringing product manufacturing to China allows you to create a higher volume of product for reasonable cost. With a little research and sourcing, you can build a partnership to manufacture your latest product invention. If your competitors successfully outsource manufacturing in China, they can offer prices to your customers that are 30 percent to 50 percent less than they are currently paying.

The most important lesson: there is no shortcut to success in working with Chinese business partners. China is a country where anything is possible — but nothing is easy. Understanding the business culture, getting all your business disciplines intimately involved in your manufacturing operations there, and mastering the details are the prongs of a winning approach.

Here are four key points to consider:

1. Business Culture: Face the Differences

Despite the fact that China has modernized a great deal over the last 25 years, it can still be difficult to understand for an American doing business there for the first time. The same fundamental differences between American and Chinese business culture still exist. Understanding and accommodating those cultural differences is essential. One example is that business in China is based on relationships — as opposed to the US where business is a transaction based and primarily focuses on economics. That doesn’t mean that economics aren’t important. It means that collaborating closely with a Chinese partner like a factory owner on the details of a mutually beneficial business model can come only after the other party knows and trusts you.
/>

Another example is that entertaining is a critical part of the overall business culture, and it is very important that you be prepared to spend time developing your personal relationship with the factory owner — often at his luxurious home that is located within the walls of the factory.

A final example: communication style. Americans tend to be outspoken, looking to cut to the chase and look for resolution. They style of many Chinese business people is to be quiet and reserved in meetings, so that you need multiple sessions with them to get the information you seek.

More AllBusiness:
The Top 25 Home-Based Business Ideas
10 Websites Where You Should Have Your Company Profile Listed
25 Frequently Asked Questions on Starting a Business
The 10 Most Creative New Business Ideas Out There/>/>/>/>

2. Make the Time Commitment

Companies sourcing product from China can control their own destiny if they commit to establishing and nurturing deep working relationships. Whether you establish your own organization in China or you use third-party providers, it is critical that the Chinese manufacturer believes you are “all in” at all levels in your company, particularly at the highest level. If they sense you aren’t all in, they will not maintain the high level of scrutiny on quality control, safety issues, and performance needed to prevent mistakes and drive quality and on-time production. That will cost you money and potential harm to your company’s reputation.

3. Sweat the Details with Your Partner

Producing in China proves the old saying “The squeaky wheel gets the grease.” Chinese factories pay the most attention to customers who spend the most time working closely with them — on issues ranging from sample making, purchase order placement, production planning and scheduling, quality control, and shipping performance.

Best practices would indicate that having a team of at least three people working directly with the factory on a daily basis produce the best results:

  • A logistics person focusing on purchase orders and shipments
  • A product person focused on the design of the product and packaging requirements
  • A quality control person making sure that the product was being produced to proper standards

If you get your top team closely involved, you will be much more in control, and you won’t be inclined to blame the factory when the finished product isn’t on the retailers’ shelves. As far as your customer is concerned, you are the factory.

4. Overcoming Problems

Even with all the cultural understanding and time and financial commitment, there will be problems to be dealt with. Long-term relationships and a group of dedicated factory partners are critical to building and maintain a successful outsourcing operation.

The bottom line is: your sincere commitment to work respectfully with your Chinese suppliers as a trusted partner — not as a disposable source of low-cost labor — will help you identify and solve problems. Remember, in China anything is possible but nothing is easy./>/>

Jack Toolan is a partner in Newport Board Group in New York City.

Read all of Michael Evans’ articles on AllBusiness.com.

Related Articles on AllBusiness:
8 Basic Things U.S. Companies Must Know When Sourcing Goods and Suppliers in China
Sourcing Goods and Suppliers in China: 8 Common Mistakes U.S. Companies Make
Five Issues to Consider When Setting Up a Business in China
Small Businesses Grow by Exporting to Mexico/>/>/>/>

For more great small business articles such as The Top 25 Home-Based Business Ideas and Keeping Your Business Ideas Confidential, visit AllBusiness.com and AllBusiness Experts. For local business information on 15 million businesses, be sure to check out InBusiness.com.

Source: Forbes Business

 
Update
2

8 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,000 by 30 p ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

8 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 a ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Australia to stop visa requests from Ebola-affected countries
Sydney, Oct 27 (IANS/EFE) The Australian government has stopped visa requests from Ebola-affected countries to help prevent its outbreak in the country, Immigration Minister Scott Morrison told Parliament Monday.
 
 
Only two people remain in hospital after Spain Ebola scare
Madrid, Oct 27 (IANS/EFE) Ten people were discharged Monday from the Carlos III Hospital in Madrid where they were in quarantine, after they showed no signs of the Ebola virus at the end of the 21-day incubation period.
 
 
Ebola co-discoverer: Crisis avoidable by acting early
Hong Kong, Oct 27 (IANS) Peter Piot, co-discoverer of the Ebola virus in 1976, said here Monday that the lesson that people should draw from an Ebola crisis was that it could be avoidable by acting early.
 
 
Geological discovery raises questions on continent formation
Sydney, Oct 27 (IANS/EFE) The discovery of fragments of Australia in the subsoil of the volcanic Vanuatu island in the South Pacific raises new questions on how continents are formed, an Australian university said Monday.
 
 
 

Latest from the Network

Reinartz out for three months with eye injury
Berlin, Oct 27 (IANS) Bundesliga side Bayer Leverkusen will be without their defensive mid-fielder Stefan Reinartz for three months as he fractured his eye socket. The 25-year-old German, who has earned three...
Read more on Sport Balla
 
Pakistan PM urged to probe London rally incident
Islamabad, Oct 27 (IANS) Pakistan Peoples Party (PPP) leader Rehman Malik urged Prime Minister Nawaz Sharif to probe a Kashmir rally incident in London, where Bilawal Bhutto was forced off the stage, media reported...
Read more on Politics Balla
 
Google employee held for 'cyberstalking'
New York, Oct 27 (IANS) A 23-year-old Google employee has been arrested for allegedly cyberstalking a former classmate, a medai report said. According to a San Francisco Chronicle report, Nicholas Rotundo, an internal...
Read more on Politics Balla
 
Indians in Washington celebrate Diwali
Washington, Oct 27 (IANS) The Indian community in Washington celebrated Diwali with the Indian ambassador S. Jaishankar noting how the festival has become part of Indian American community's presence and profile in the...
Read more on Celebrity Balla
 
Astronomers produce first images of exploding stellar fireball
Washington, Oct 27 (IANS) The expansion of thermonuclear fireball from a nova that erupted last year in the constellation Delphinus was more complicated than the simple models used previously would have predicted,...
Read more on Business Balla
 
Paul Allen Donates At Least $100M to Fight Ebola Virus
Paul Allen has just made himself a certified crusader against the deadly Ebola virus.Allen, the Portland Trail Blazers and Seattle Seahawks owner, pledged to donate "at least $100 million" to Tackle Ebola. He wrote a...
Read more on Sport Balla
 
Spanish La Liga standings
Madrid, Oct 27 (IANS) Following are the Spanish La Liga standings after Sunday's matches (tabulated under matches played, won, drawn, lost, goals for, goals against, points), according to Xinhua. Barcelona 9...
Read more on Sport Balla
 
China stocks open lower
Beijing, Oct 27 (IANS) Chinese stocks opened lower Monday with the benchmark Shanghai Composite Index opening at 2,293.57 points, down 8.71 points or 0.38 percent. The Shenzhen Component Index opened at 7,881.01, down...
Read more on Business Balla
 
Italian Serie A results
Rome, Oct 27 (IANS) Following are the collated results of Italy's Serie A matches Sunday, according to Xinhua. Chievo lost to Genoa 1-2 Juventus bt Palermo 2-0 Udinese bt Atalanta 2-0 Cesena lost to Inter Milan 0-1...
Read more on Sport Balla
 
China mulls scrapping death penalty for 9 crimes
Beijing, Oct 27 (IANS) Chinese lawmakers are considering to remove the death penalty for nine crimes, including smuggling weapons and nuclear materials. The draft amendment to the Criminal Law was submitted Monday to...
Read more on Politics Balla