1. Is outsourcing right for us?

Not all items or components are right for outsourcing, but if you answer “Yes” to any of the following 10 statements your company could benefit from it

1) I am losing market share due to lower-priced competitors
2) My products are labor-intensive, produced in bulk and/or in repeatable processes.
3) My manufactured product costs exceed $100,000 annually
4) I'm looking for new market opportunities
5) I need to offer my products in different materials but cannot justify the start-up costs.
6) I'm having a hard time finding a company to manufacture my product.
7) I need to expand my manufacturing capacity to meet demand and to grow.
8) I'm finding it difficult to attract workers to do the work I need at the wage I can afford to pay.
9) I need to expand my product line without spending more money on equipment, people and facilities.
10) I have been forced to either reduce or eliminate features from my product due to manufacturing costs.

2. What products are good candidates for overseas sourcing?

The greatest advantage to sourcing overseas is in taking advantage of lower international labor rates. The disadvantage is higher shipping costs. For a product to be produced more economically overseas, the labor savings must outweigh the increased shipping expense. Consider products with high assembly costs or high labor costs that are small in size. Consider products that require manual operations. Consider products that stack or nest well. Consider products that are lightweight and dense. Consider products that are mass produced or produced in sufficient volume to merit shipping via Full Container Loads (FCL) and because it is generally easier to maintain production than it is to start production, consider repeatable or staple products.

Generally speaking, following is a few guidelines which can help you to determine if outsourcing will benefit your business:

1) Is the manufacturing process for your component or finished product labor intensive?
2) Will your costs for a manufactured product exceed $100,000 annually? Freight, insurance and overhead costs on an item become proportionately smaller as the numbers go up.
3) Is the product freight friendly?
4) Are you able to plan and forecast? Importing is not the fastest option, but the savings can be well worth the wait.

3. Why do you outsource to China ?

Obviously there are many countries that are candidates for overseas sourcing. China , however, combines advantages are unique to the world's most populous nation .these include:

1) One of the world's lowest labor rates;
2) Abundant indigenous raw materials;
3) A well established industrial base;
4) Aerospace and defense industries that are technological drivers for industrial sectors
5) Mature communication and transportation infrastructure
6) Political stability and rapidly growing economy

4. How will China sourcing affect my costs?

China sourcing‘s effects on your costs depends on many factors, such as labor intensity, order volume, freight efficiency and so on. It is not unusual to see savings of 75% or more on both tooling and production in much product area. Generally speaking, we can see 50-75% saving for tooling and 25-40% saving for manufacturing over domestic sources.

Not like Canada , you can expect to see a wide variation in prices between factories as they respond to identical requests for quotation. This variation could be due to the nature of the factory.

5. Can we take the direct approach to china sourcing?

Unless you are willing and have muscle to set up your purchasing and quality control organizations in China , we advise against the direct approach.

Some companies have achieved success by working directly with Chinese factories. Unfortunately this has been the exception rather than the rule .there is a number of reasons for this.

1) Trying to locate the right factory is exceedingly difficult. Because there are too many and scatted too widely geographically.
2) Difficult to achieve the best price without competition each other among several good candidates.
3) Hard to supervise the quality of the production.
4) Language barriers, culture difference, time zone, lack of reliable industries directories, enterprise organizational difference, legal system and personal network etc.

6. Advantages of using 3 rd party to aid in outsourcing

3 rd parties can be very helpful in advancing your sourcing projects while providing protection and value added services .the ideal 3 rd party would have following attributes:

1) Office in Canada and China
2) Native Chinese engineers and negotiators in China
3) A Canada based engineering staff to support technical communications with you
4) A program in place to assure quality
5) Canada and Chinese based logistic support for shipping, custom Clearance and warehousing
6) Legal recourse in Canada

7. Why should I order in large quantities?

The most economical transit from overseas sources is Full Container Load (FCL) ocean freight. Product is loaded into a 20-foot or more commonly 40-foot shipping container and then loaded on large ships. Completely filling a 40-foot container is the best value and a lot of product fits into a 40-foot container! Fractional container space is available (referred to as Less than Container Load or LCL), but is significantly more expensive. There are several flat fees to consolidate an LCL shipment in China and then those same fees repeat in Canada to un-consolidate the container - because everything goes across the ocean in a full container. In addition to the extra handling fees there are extra delays and extra opportunities for damage to occur during the extra handling. FCL is so common in China that many factories will not competitively bid projects that are not at least FCL in scale. If any inland trucking is required, the 40-foot containers are approximately the size of a standard trailer and the most economical haul. This long answer highlights that pricing and logistics are the reasons you will want to consider ordering in large quantities.

However, your particular business needs may be best served with LCL shipments (or even with air freight shipments). Please contact a QMMC representative to discuss the pros and cons of LCL and FCL for your specific product needs!

8. Do you have a minimum order quantity?

We have no minimum order quantities but our factories in China often do not quote low volume items because of the time investment involved in taking on new customers. Smaller production runs may be accepted if the product requires assembly, packaging, and other labor intensive and value-added functions. More value-added operations translate into more cost savings.
A typical minimum starting order is $10,000 .but the larger the quantities, the more savings you can expect.

9. What types of products does QMMC WISDOM specialize in?

QMMC WISDOM focuses on custom engineered components and assemblies. We don't stock any products nor offer catalogs of mass produced parts for distribution. We deliver high quality products at the lowest possible cost by only selling products that are specifically requested by our customers. Our offices in China are prepared to source almost any product that can be represented by engineering drawings, samples, or datasheets.

10. Who determines which factory will be used?

Our customer's guidelines generally indicate what type of factory is required to manufacture their product. We will, however, select the most qualified source to ensure that all of our customers' requirements are met.

11.What is your company's standard response time to quotes?

RFQ response time depends on the product. The average quote time is 7-10 days

12. What do you like to see in the RFQ package?

Your RFQ package should include:

Detailed drawings
3+ samples of the product (options)
Estimated annual volume and lot sizes
Target costs (options)
Estimated award date (options)
Potential manufacturing concerns

13. Do I have to submit CAD drawings to get started?

CAD files are not required but are highly recommended. Electronic version of the files expedites the quoting process. QMMC engineers can translate, annotate and protect certain information easier with electronic files.

14. Does it take a long time to deliver the product from China?

No. Shipping has become very efficient. Not considering the time it takes to produce the products, it typically takes just under 20 days to cross the Pacific Ocean by ship. Sometimes demand for Asian goods causes delays at Western ports in Canada during busy seasons, like the months preceding Christmas. Once unloaded, the cargo must pass Customs and then transit inland by rail or truck to your location. Unloading the cargo and clearing Customs may take up to 5 days. Please plan on 30 days in transit and up to 45 days during busy seasonal periods or for delivery to Ontario locations. Air freight is always available and can save time but at substantially increased cost!

15. How do you conduct due diligence on manufacturers?

This is the vital step to ensure a risk free manufacturing in China . It all boils down to picking the right manufacturers to work with. Make no mistake; risk free is NOT problem free. In manufacturing, problems surface all the time, big or small. Problem is just a way of life. We may still have manufacturing problems working with right manufacturers. We certainly will have endless problems if we work with risky manufacturers.

Potential manufacturers are identified via industry contacts, government officials, trade associations, trade directories and publications, industry experts, internet, internal database and our existing network of reputable and trusted manufacturer .physical inspection of production facilities must be performed before any works are contracted out.

At the same time, we keep updating and refining our internal database to take into account the latest changes in China 's manufacturing landscape

16. Can I visit the factory in China ?

Unlike brokers or agents who shield you from the factory, QMMC encourages you to visit the factory and participate in the supplier qualification process. We see value in bringing you and the manufacturer together. Once a confidentiality agreement is signed we provide you all the factory details, including audit, photos, website links, etc. So whether you actually visit the factory or not, QMMC is prepared to get you as close as you want to factories in China .

17. Tell us more about your supplier audit.

Our supplier audit will deal with:

Factory general information
Products produced
Manufacturing process and software available
Factory strengths and weaknesses
Production equipment
Test and lab equipment
Product capability
Quality certificate
Quality document
Factory tour

18. Do I need to deal with the importation, overseas shipping and the Customs?

No , you don't need to. We will take care of them all. We take care of the paperwork, documentation and the Customs clearance at both ends, not only the importation in the Canada , but also the exportation from China . You only need to provide us with your delivery address; we'll have goods delivered to you.

19. How do you know what prices to negotiate with manufacturers?

Our staff has many years of experience working in the manufacturing and exportation field, and we are a manufacturer in China . We understand the manufacturing in China from inside out how the system functions. Our knowledge enables us to put ourselves in other manufacturers' shoes, take into account the regional and local manufacturing environment, the supply and demand of all factors involved, the competition and quality, and know at which level the prices are reasonable, and at which level the prices become attractive without sacrifice on quality.