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Dealing with International Subcontractors

Quality is out there but you have to work to get it

David Iwinski Jr.

Managing Director

david.iwinski@bluewatergrowth.com.

AUTHOR

David-Iwinski-Jr.png

David Iwinski Jr.

Managing Director

Blue Water Growth

david.iwinski@bluewatergrowth.com

US Mobile: +1 412 352 7997

China Mobile: +86 183 2128 4064

Skype ID: david.iwinski.bluewatergrowth

Dealing with International Subcontractors

Quality is out there but you have to work

to get it

By David Iwinski

As globalization continues to evolve the economies of emerging nations, new competitors are being introduced to production supply chains. While in the recent past a firm might have manufactured goods in China for United States consumers, now the search for low-cost fabrication and assembly might have you manufacturing merchandise in Vietnam for eager high-paying customers in China.  With the pool of these new participants growing rapidly, the quest for cost control coupled with high quality and reliability has never been more important.

 

Here are a few tips to make the journey easier:

 

Use Highly Detailed Specifications

 

When dealing with a new production partner offshore, start with exacting detail in your specifications. Take nothing for granted, not only laying out the expected product requirements but give a full explanation of process and method of assembly.  If your product must conform to a government standard, be sure that these requirements are expertly translated and explained. If your specifications aren’t meticulous, you can expect shortcuts to be taken.

 

Over Communicate

 

Often problems that occur can be solved only if you catch them early, but off-shore production partners may be reluctant to share the challenges they face in delivering your product. Part of this is cultural, as many people are hesitant to disclose difficulties as they believe that might show weakness. However, they may also have a sincere belief that they can eventually solve these challenges and “catch up” later. Regular calls, video conferences and visits can build trust and allow you to find out about these issues before they become a crisis. You must further develop regular milestones to be checked to ensure that orderly progress is accomplished. Keep a cool head when they tell of their problems, as they are really doing you a favor by not hiding them.

 

Expect Delay

 

Build plenty of contingency into your schedule, as off-shore producers need a lot of time to develop the confidence to deliver on a just-in-time basis. Also remember that many times project delay is not the fault of your production team, as things such as unanticipated delays in clearing custom in the country of origin can add weeks to delivery schedules. Take into account time zone effects as well.  An email about a specification issue from a US producer might well be asked and answered in the same business day, but off-shore production almost always has a built-in delay of a day due to time zones. Over the course of a project, those day-by-day delays can add up.

 

Contractors Need To Earn Profit

 

While most people know that China wages and costs have risen significantly over the past 15 years, many still have the idea that other emerging economies have manufacturing done at extremely low levels of compensation.  This belief can cause buyers to drive hard deals that producers may agree to, assuming they can recover costs later via high charges for changes once you are fully committed.  Remember, you want to be one of the best customers for these producers, the customer they work hard to satisfy. If your deal makes you one of their worst customers, you can expect the lowest level of responsiveness and quality.

 

There are still great bargains to be had with global production but, as always, you have to work hard if you want both a good deal and great quality!

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