Manufacturing in China Cheatsheet

Berkeley Sourcing Group

Manufacturing in China is a many-headed dragon and to do it well takes a deep understanding in a variety of fields and experience: cultural, business, economic, processes… I’ll follow up later with a more in-depth look at these factors, but for those just starting out this entry will cover the basics of the process of sourcing and manufacturing, what to watch out for, and answer some of the standard questions.

Which Path to Choose

There are a few different paths you can take to get a product manufactured in China and the path that fits best for you will depend on your comfort level with manufacturing and the newness of your product. If you have experience with manufacturing and/or you’re just trying to buy an existing product, then you may be able to try to go straight to the factory through a sourcing website. There are a number of sourcing websites out there now but the two biggest are:

Factories and trade companies from all over the world post their goods (and other people’s goods) on these sites trying to connect with customers willing to place orders. In China a very large portion of the postings are from trade companies although they will say they are the actual factory. A trade company facilitates the interaction between the buyer and the factory and takes a commission for their work. There is a huge degree of difference in service between the different trade companies out there. On the lower service end a trade company is simply looking to connect first with the customer to broker the deal and offers little in the way of support. These are mostly the kind of trade companies you’ll find on Alibaba and Global Sources. On the higher service end, a trade company can offer many services such as translation, intellectual property protection, quality control, and help with shipping and logistics. Berkeley Sourcing Group is a full service trade company, meaning we can manage every step of the manufacturing process from sourcing the factory to the shipment arriving in the domestic warehouse.

If you are making a new product or do not have much experience with manufacturing, then working with a trade company or a trade consultant is critical. Most importantly, you want someone, and hopefully a full team of people, ON THE GROUND in China to be your eyes and ears and help you take action with the factory. The two biggest concerns of going to China are stolen intellectual property and quality and it’s very difficult to control either of those from your computer 7,000 miles and an ocean apart. Even when you have somebody on the ground it can be difficult… just ask Mattel about lead paint (http://www.msnbc.msn.com/id/20254745/), or Apple about their iPhones (http://www.nytimes.com/2009/04/28/technology/28cell.html). You must be very careful about both intellectual property and quality control at all times. Don’t take any promises about either at face value. Test them and prove them in each step of the process.

The Engineering Package

Whomever you are going to work with, you will need a good “engineering package”. As best as you can, you want to specify exactly what you want to make so that there is no confusion by either party down the road. If there is any room for confusion, confusion will abound! If there isn’t any room for confusion, there will still be confusion due to language and cultural differences. A good engineering package involves:

  1. 3D drawings (made by an engineer)
  2. A complete Bill of Materials (BOM)
  3. Clear specifications of each component

You don’t need to know how to make the product (although that helps), but you do need to know exactly what product you want made and an engineering package allows you to communicate that clearly. If you’re not sure how to put this together, contact us and we can connect you with advice or referrals to good design engineers.

Getting Quotes

Once you have the engineering package, you will need to send this to get quotes from various factories and trade companies. You should first sign an NDA with each company you will share your ideas with if you have new ideas to protect, but note that NDAs signed by a Chinese factory are worth about as much as the pdf file they are written in. This is where working with a local company can be valuable as the laws are usually much more enforceable. There are a number of ways you can protect your idea without legal documents. I’ll go into them in detail in future entries.

First the factory should make two complete samples for you. One is for you to keep, the other should be signed off by you and sent back to the factory as their gold standard for comparing with the production units. This sample, along with the drawings and specifications, is a critical communication tool so that all parties understand what is expected. This can be accomplished in most cases although for plastics you will need to make the tooling before you can achieve a true production level sample.

After you approve the samples is a good time to get to work on the inspection guidelines. You’ve already told the factory exactly what you want, but knowing how to test that the product is correct can be a different animal all together. A good factory or trade company should be able to provide you with the inspection criteria, but if they don’t, you should make the criteria yourself. This can be a little tricky if you don’t have experience, so if you’re not sure about this step, you should make sure you have a good partner. Thorough inspection guidelines should test for every specification of your product to a reasonable extent.

Making a Trial Run

At this point, you will probably want to make a trial run, a small run to prove the production abilities and seed the market to draw greater interest. When the factory starts production, they should send you the first production units off the line because they will invariably be at least a little different than the samples you received because the process of making a sample is different than the process in production. Receiving the first production units can save a LOT of problems down the road as you can hopefully stop production if anything is wrong before all the material has been converted into useless product.

The next major step is when production is complete. Along with doing in-process inspection along the way, a final inspection should be done on a random sampling of units. It is best to do this with a third party whenever possible, either the trade company you’ve been working with, or an outside party if you have been working directly with the factory. This can save an enormous amount of time and money. The costs associated with catching problems before they ship are tiny compared to the costs of finding the same problem a month later in a warehouse where you don’t have any capabilities to fix them.

So, that’s the quick and dirty of it. This has been an attempt to give an overall outline of the process, how it works, and some of the critical elements. I’ve intentionally left out a number of steps and a plethora of potential problems in order to keep it short, but I’ll follow up in future entries to get into the details.

Brief summary of the summary

  1. Create a good engineering package
  2. Find a good partner either by using a trade company or going direct to a factory
    1. Sign NDA’s with whomever you work with if you have a new idea
  3. Develop a plan to protect your intellectual property
  4. Have samples made for your approval
  5. Create the inspection guidelines
  6. Get and approve first production units
  7. Make a trial run
  8. Do final inspection on a sample of products with a third party
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4 Responses to Manufacturing in China Cheatsheet

  1. Josh C. says:

    thanks for the great overview. i’ve got you guys on my favorite list. keep the blogs coming.

  2. Interesting article, and the website seems nice all-around also, I been to a few pages before commenting, I usually don’t comment unless I find there is something worth-it on the site. Great site, and thank you for the quality.

  3. Pingback: Manufacturing in China Cheatsheet | Importer's Corner

  4. Shane Lewis says:

    Nice Article! Will be contacting you.

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