The key to setting up a successful strategic sourcing program is to do it in a way that keeps your risk at a minimum and makes any production transition as seamless as possible. These are the steps we suggest to start manufacturing in China as quickly and efficiently as possible.
1). Pick one of your existing high volume products that require a lot of labor, assembly work and/or has very high packaging costs. Remember, commodity prices (of plastic, metal, etc.) are about the same any where in the world. So, the best items for offshore manufacturing are ones that involve the most labor and/or multiple processes to make. The item must also be easily containerized so you don't wind up shipping a lot of air.
2). Send us a RFQ for a partial run of that product so we become your “second source” until your China manufacturing program is up and running. We will get you a quote so you will know the savings you will achieve by moving the product offshore. Include with the RFQ, detailed electronic drawings, material specifications, quality and testing requirements and 4-5 samples of the product so the international contract manufacturers who are quoting the project will know the exact quality standards you expect. Include the yearly volume you will be ordering once the initial test runs prove successful so we can get you a better quote.
3) We will then send the electronic drawings and relevant documents to our offices in China so they can get accurate offshore manufacturing quotes from three or four different China manufacturers. This process should take 1- 2 weeks.
4). Once you get the quote, you can decide whether you wish to proceed to the next step. If you do, we will send the samples to the manufacturers in China so our vendor has a sample of the quality you require.
5) If tooling is required, you must then give us a certain amount tooling deposit and we have the necessary tooling and 1st Article Samples made. You will find Chinese tooling prices very reasonable.
6). Once the 1st Article Samples are approved, you pay the balance of the tooling and a down payment on the first production run. The Chinese company will then make a limited first run of your product.
7). As soon as you get comfortable with the manufacturing process, you can increase the quantity of each subsequent run until it is completely made through offshore manufacturing thereby maximizing your cost savings.
8). Once we are successfully producing one of your products, we could visit your office and assist you in determining any other potential candidates for china sourcing. We will advise you on the products that will make the most sense to outsource with China manufacturers.
By using this manufacturing strategy, you keep your risks to an absolute minimum. You also don't risk disturbing your production schedule because you will start by only sourcing a portion of your initial product. |
