Oversight: The Key to Profitable Outsourcing
Increased Red Tape and Rising Labor Costs in China Demand Local Involvement
For manufacturers looking to outsource the manufacturing of a component or completed products, shopping for a factory that will promise to deliver a lower price is no longer sufficient. The reality is that today, outsourcing partners are being held to a much higher standard than they were five and even one year ago. Increasing global economic pressures and international governments are forcing local manufacturers and assemblers to rethink their priorities and establish a much more comprehensive list of qualifications when looking to outsource.
Sourcing Methodology Must Identify Best Practices
With more companies outsourcing component manufacturing or assembly, leading outsourcing partners are helping OEM's strengthen their transition teams. Even more critical is their ability to help identify foreign suppliers and evaluate their capabilities. In order to achieve best practices in outsourcing, you must apply a methodology that will help establish the criteria for potential sourcing partners. Once adequate criteria are in place, facilities, equipment and experience must be investigated, analyzed and evaluated. This is a very demanding process that simply can never be cut short.
A Local Presence in China is Critical
The only way to confirm the existence of ISO certification and the required skills is to rely on a sourcing partner that has qualified representatives working in China. These outsourcing overseers must conduct the due diligence required to make sure that best in class operating procedures and control processes are in place. Knowledge of local customs and governmental restrictions will help forge a working partnership that can adapt to change going forward. Today, with increasing governmental influence and volatile economic conditions becoming the order of the day in China and around the world, the ability to audit and monitor sourcing relationships is critical.
More than ever, developing trust and mutual respect is the key to success in global sourcing. Concentrating on quality, reliability and availability of resources will not only result in a finished product that lives up to the expectations you would set if you were manufacturing the product in-house, but will help assure the greatest output and lowest delivered cost in the end. |
