The Secret of Successful China Manufacturing

China-based factories produce goods for the global economy. They have scaled their manufacturing capabilities well beyond what was ever believed possible. When you outsource to China, you’re working with time-tested factories that have been producing quality products in similar industries as yours for years on end, and in massive supply. Manufacturing in China also gives you the advantage of geography by placing your products near fast-growing Asian markets, which can be a huge advantage if your business plan includes selling in these Asian countries. Sourcing, manufacturing and quality control are all local which means you don’t waste time shipping your goods to various locations. If you want your product delivered in time for your seasonal sale, China could be the place for you.

It’s certainly true that many larger corporations regularly outsource their manufacturing overseas. However, you don’t have to limit yourself because of the size of your operations. Regardless of your company’s size, outsourcing and offshoring may be able to help you. Overseas manufacturing can be more efficient for your business and product regardless of the amount of product you need to have made, so long as you plan and budget appropriately to your demands.

Every factory over there has experience creating and assembling many different types of products. They may have already made a product that is very similar to yours and they can draw on that knowledge. Here are few important things business owners can do while opting for China manufacturing-

Ask for references: The first step is to ask each potential manufacturer if they have previous experience with similar foreign companies.

Use a good manufacturing contract: For what constitutes a good overseas manufacturing contract such as OEM, CM and ODM.

Ensure all parts of the product are feasible: Once you have a prototype you’re happy with, you can finally start ordering the tools you’ll need to start production.

Setting up or buying a facility or entering into a joint venture: Setting up or buying your own manufacturing facilities overseas can be extremely expensive.

Communicate clearly: This applies even in English, but it’s hyper-important when you’re dealing with companies based in non-English-speaking countries. Avoid long words or unnecessary jargon, especially things that might trip up machine translation.

 

Among the various manufacturing branches, the metallurgical and machine-building industries have received high priority. These two branches alone now account for about two-fifths of the total gross value of industrial output. China, therefore, still imports significant quantities of specialized steels. China’s manufacturing is predicted to move to the inland provinces. This will happen as wages continue to rise in the wealthier coastal provinces. The Economist writes, “The next China may instead lie closer to home: within China’s borders, but away from its coasts.”

Realizing the potential of its market in the era of globalization, China has spent the last few years developing its technology. Heavy investments in research and development have helped the country gain an edge over other emerging countries. Sourcing, manufacturing and quality control are all local which means you don’t waste time shipping your goods to various locations. If you want your product delivered in time for your seasonal sale, China could be the place for you.

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Make your China Manufacturing Contract More Effective with the Following Details

U.S. companies need to be pragmatic and they should analyze the Chinese market separately to their home market. Collaborating with the Chinese companies with a long-term goal in mind is the strategy American business owners can adopt for a stable success. It has been noted that China is entering a period of more managed growth. American entrepreneurs need to come up with a well-planned business strategy to cash in the maximum out of the Chinese market.

The main reason to consider manufacturing in China is almost always the lower manufacturing cost. Especially for mass-market products, low production cost means that you have enough supply to maintain competitiveness in the market. Some companies also choose to outsource to manufacturing facilities in China to ease the distribution process to other countries. When the manufacturing process is properly handled elsewhere, your company can focus its resources on research and development for future products.

Lower Compliance

Manufacturers in the West are expected to comply with certain basic guidelines with regards to child labor, involuntary labor, health and safety norms, wage laws, and protection of the environment. Chinese factories are known for not following most of these laws and guidelines. Since China manufacturing is able to afford cheap labor, it can implement a greater number of labor to expedite the production process which lower the manufacturing period. Besides, continuously manufacturing goods on the same line in terms of mass production can assist in reducing production time. To increase the manufacturing production capacity, China has developed production scheduling method.

Scaling Capabilities and High Output

Arguably, one of the best parts of Chinese manufacturing is that’s easy to ramp up the production of your product.

>> Fast turnaround

>> Aggressive production schedules

>> High volume quantities

Not every factory or area of the world is capable of doing this. You need a partner that can grow with your business.

Written Manufacturing Contracts

Sourcing in China is, after all, an international transaction. Before you make a payment, you need to think about how you are going to get your money back if there is any dispute over product quality or delivery. Otherwise, you are at the risk of losing your money. Well-written contracts typically include the following provisions:

>> Parties involved

>> Terms on samples, price, quality management, logistics

>> Definition of product quality, quality satisfaction, timely delivery

>> Payment terms

>> Liability for breaching contract

>> Choice of law

>> Dispute resolution

>> Arbitration clause

>> Attorneys’ fees

A maximum number of Chinese suppliers have stepped up in recent years. By identifying a reliable local supplier, international companies have a simpler, more efficient option for increased production. This has encouraged even more Chinese suppliers to update to the latest technologies and raise their standards in order to attract more customers.

Manufacturing in China also gives you the advantage of geography by placing your products near fast-growing Asian markets, which can be a huge advantage if your business plan includes selling in these Asian countries. Sourcing, manufacturing and quality control are all local which means you don’t waste time shipping your goods to various locations. If you want your product delivered in time for your seasonal sale, China could be the place for you.

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