As a thriving business in the manufacturing industry, we feel it is our responsibility to give back to our clients and partners by sharing our knowledge and expertise in this industry. Here is a collection of the best manufacturing tips which could come handy if you are in this business.
All these knowledge and tips were earned through first-hand experience and we would like to share it to you for your own benefit. We treat our clients and partners not as competitors but colleagues as we work hand in hand for our respective success.
Finding the Wrong Supplier
Have you ever worked with a supplier which didn’t seem to have your best interests at heart? Maybe there was poor communication between you and the factory. Or, maybe your supplier hit you with one excuse after another to explain poor product quality or a delayed shipment. If you’ve had experience with either situation, you probably wish you’d known how to avoid it.
No supplier relationship is perfect, and there will always be hiccups along the way. However, you may want to think twice if you repeatedly encounter one or more “red” flags. Look out for the following telltale signs of a bad supplier:
Telltale Sign #1: The story is always changing
First it was a delay due to an issue at a raw material supplier. Now it’s a government-mandated brownout to conserve electricity. The next thing you know, production grinds to a halt because one worker hurt himself using a saw. All of these examples are, in fact, real. But you’re not wrong in being skeptical if they occur repeatedly and affect your shipping schedule.
Telltale Sign #2: Your supplier is never wrong
You might hear that the increasingly poor quality you have noticed over the last 5 shipments is just your imagination and the result of your quality inspectors being too strict. You may be told to ignore the fact that you have documented an increase in returns from your top customers. You may hear the excuse that there must be an error with your data because the supplier’s quality remains stable. All of these are the supplier’s attempt to sidestep responsibility and put the blame else. Hold your supplier accountable for quality fade or other issues. Avoid working with a factory that won’t take responsibility.
Telltale Sign#3: Your supplier knowingly arranges inspection based on false information
A common example of false information occurs when you or a third-party schedule inspection for a certain date, only to arrive at the factory and find the product isn’t ready for inspection. The supplier booked the inspection knowing the factory would not be ready. This is generally done in an attempt to avoid the inspection process and is a HUGE red flag which indicates you need to inspect the order before shipping. If this happens repeatedly, then you run serious risk as an importer.
Telltale Sign #4: You’re told the inspection company did a bad job. However, your supplier can’t provide any specific details explaining what it really means.
It is common practice for suppliers to call inspectors incompetent or question their integrity. In most cases, you’ll find this coincides with an inspection report outlining a long list of quality issues. The only thing which might be more frustrating than a failed inspection report is to hear the inspector didn’t know what he was doing or that he asked for money in exchange for going easy on the factory. If the factory is light on details, then your supplier is probably just trying to draw your attention away from the real issues. Insist the factory make future complaints by phone while the inspector is still on-site. This is the only way to really investigate the issue.
If these examples remind you of a current supplier, then start to protect yourself by visiting the factory regularly in person. This process allows you to see things for yourself and assess the situation. Your supplier will be less likely to lie to you in person if you make regular visits. Don’t forget there are plenty of reputable suppliers out there with which you could be working. There are also companies which can help you identify them if you can’t do this yourself.
First Steps to Sourcing
When starting your sourcing project, you should first conduct some serious research to save your time and money. Here are a few tips you should consider;
- Make sure your supplier is a manufacturer, wholesale supplier or a broker.
- Know the place where the factory is located.
- Draw up a contract with your supplier. A written contract outlining terms and conditions of your relationship will help to avoid disagreements or disputes that pop up later on.
- Monitor the time of year you are importing.
- Hire a really good transport pro, they will make the right questions, prepare documentation, arrange for payment and make timely deliveries.
- Watch for unexpected surcharges.
- Beef up your finances and consult with your banker about best payment options.
- Strive for landed costs and pay attention to a port of exit, entry and delivery point. Use internationally agreed Inco terms (International Commercial Terms) to reduce the risk of delivery problems or misunderstandings.
- You do not need a license to act as an importer; however, some items require a license or permit from various government agencies in order to be imported.
Supply Chain Management 101
A short, straightforward, and controllable supply chain is key to success. Whether sourcing a component or finished good, you should treat the chain as an asset, giving you an advantage over your competition.
A large number of big companies use expensive supply chain management programs which include item classes, order taking and export regulations. Export software allows companies to manage the supply chain with greater ease and efficiency. Based on the complexity and the costs associated with such software, most small businesses should rather work closely with logistics experts when handling their goods. For small orders, UPS, FedEx, and DHL all suffice. For larger ones, more traditional ones such as Weiss-Rohligg will work well.
More importantly, some rules of thumb should be followed to minimize your exposure. Source from countries with minimal regulations; you want quick transport in and out of a country. Also, take advantage of competitive advantage to minimize costs but not by reducing quality. Remember if you pay peanuts, you get monkeys.
Ensure that suppliers are partially performance based so they feel like they have a stake in the product’s success. But remember, don’t put your eggs in one basket, so build up a secondary source to hedge against any supply issues which may arise: performance may decline, they may encounter financial difficulty, or delivery times may not be met. When choosing a supplier or suppliers, tailor the supplier locations to your clients’ needs.
The first consideration is the reliability, while the second one should be the vertical production process. While vertical production should be the end goal, start with trusted people, then build up from there. Over time, you will have enough contacts and know how to establish full control over all production
Most supply chains are established on value creation which makes the firm first look at the value of the item, then determine which production parts are most important. A functioning supply chain should be responsive and flexible at both local and foreign levels. Remember.
The extensive collection of manufacturing tips mentioned beforehand is a no-brainer to keep on your list. All of them will tailor your way to success in manufacturing. You must first indulge in the basics before you get to test the more complex waters in this industry.