For businesses looking to scale up their manufacturing capabilities, outsourcing manufacturing services to overseas manufacturers has been the to-go zone since the 80s. This has seen many businesses gain a competitive advantage in their industries. While this has its own advantages such as lower labor costs and affordable mass production, there are challenges as well. If you are currently experiencing these challenges, or you are looking at outsourcing your manufacturing overseas, here is how you can overcome these challenges.
1. Do your due diligence
One of the biggest challenges that come with outsourcing manufacturing services from overseas is finding a good company to work with. There have been many cases of businesses losing their hard-earned money to fraudulent companies overseas. To avoid falling victim to this, it is important that you do your due diligence before committing your money to any company. Utilize your networks to find a reliable company. Visit the country of choice and do research about the company with the locals. We all know papers can be forged, so do not rely on the bank statements that a potential manufacturing company sends you. Make sure you visit the site and witness the operations going on there.
2. Communicate clearly
Language barrier has always stood out as a challenge that businesses face with overseas manufacturers. If both parties can’t understand each other, various problems are bound to arise from this such as misunderstanding instructions and missing critical information on orders and schedules. The first step to overcome this challenge is to hire translation services from a reputable translation company. Be specific to that you want someone who is conversant with manufacturing. He or she should help you translate emails and phone calls. Another way to tackle this is to ensure you are speaking slowly and clearly. English is a worldwide business language, and people from overseas may fail to understand you if your accent is too heavy or you include slangs in your conversation. Lastly, ensure that any phone conversation is followed up by an email for confirmation purposes.
3. Have detailed documents drawn by a professional
Legal issues have also been reported with overseas manufacturing. The most affected being theft of IP and copyright violations. It is important to make detailed documents when dealing with overseas manufacturers. The manufacturing agreement should include clauses addressing these issues, stating clearly the penalties involved in case of violations. Ensure that the agreement is written by someone who knows about international law and manufacturing. Translation services become vital in this too; all documents should be translated to their native language to avoid any misunderstanding.
4. Ensure quality control is done at the factory
Some overseas countries use unskilled labor in manufacturing; the employees are then paid as per the units one manufactures. This can cause problems when it comes to the quality of the product. It is important that you are hands-on on this, make regular factory visits to check on the quality. Alternatively, you can hire an inspection company to do the job for you. Ensure that all products are properly inspected before leaving the factory. Dealing with any quality issue is easier when done at the factory than when the shipment is already in your hardware. Noting clearly your standard quality of materials, packaging and product specifications in the service level agreement goes a long way in preventing quality issues.
5. Communicate clearly on scheduling
Another challenge that can cost your business a lot of money is scheduling problems. Sometimes you may find your products arriving late when all your stock is out, making you miss on sales. Other times they may be early when your hardware is still full, forcing you to outsource storage. Make sure that the manufacturer understands how critical it is for him to stay on schedule. Clear communication plays a major part in this as well. Schedules should be explained in detail and in a language that the manufacturer understands. The manufacturing agreement should include a clause on scheduling including any compensation in case you lose business due to scheduling problems.
The first step to dealing with overseas manufacturing challenges is to avoid them in the first place. Ensure that your company manages every step in the manufacturing process and regular communication is done on the logistics. Alternatively, you can seek the services of a manufacturing partner to do this on your behalf. The partner will deal with manufacturing, leaving you to manage the other aspects of the business.