Picking An Overseas Supplier
Firstly, let me say that if your touring factories in China looking for a supplier, you should have someone with you that can read and speak Chinese. Factory visits are like dealing with a used car salesman, the factory will show you all their good points and ignore all the bad ones. If you ask anything they will usually say “of course” and quickly move on to something else.
Having said that, let me point out that most factories are fine. They give you what you ask for and run in a relatively professional manner. These tend to be the larger factories that have large orders and constant oversight. Great if your Samsung but most companies I deal with are smaller entities trying to make a living in competitive markets.
So what should you look for if you are touring a factory for yourself? The first thing is cleanliness, is it generally clean? Are the products and components kept in a neat and orderly fashion. That means no items on the floor, things are on pallets or shelves, not in garbage bags on the floor which I’ve seen. I am reminded of an employee I had at one point that was basically a mess. Their work was sloppy, their desk was messy and they were always late. During the interview though they seemed neat and had good attention to detail. Well, one day while walking by their car I had a look inside, it was a disaster zone. If I had seen their car first I would have never hired them to start with.
Equipment, does the equipment seem in good order and kept up? In most larger factories the equipment will have maintenance tags attached to them showing the regular upkeep. Smaller mom and pop factories will probably not maintain these standards but the equipment should be kept in good working order as down equipment will affect your orders.
Employees, this is going to be difficult because it is often hard to tell the ages of the employees by looking at them. The legal working age in China is 16 but some factories have a minimum age of 18 for employees. If you get a proper factory inspection, the employee documents will be examined to confirm the workers are of legal age.
Facilities, does the factory have room for your products or to expand? I’ve seen too many factories that will store products in different buildings around the area because they don’t have enough space. Things like this may be a security issue. I have also seen small factories so packed that you couldn’t move a pallet around the floor. If business goes well can they keep up or expand to meet your demand?
Finally, just a little note on business practices of factories. It is a common practice to give a very low price to get the order and then to slowly raise the price over time. Another common tactic is to reduce the production cost to make up the shortfall. Things might be changed without your consent like cheaper cardboard boxes, thinner plastic walls, different ingredients, whatever, the list is endless. The factory will know where they can save money in production of your product 5 minutes after they see the sample. They also know once production starts you will be hesitant to change to another supplier so you will probably accept small changes over time, and that’s where they make back their money. This is especially true in the plastic injection molding industry because of the cost of start-up and molds.