Working in China for the last 20 years, I sure have seen many things. I get asked by colleagues what they need to know to be successful there. Pack a buffet, do you have a month to listen? I never knew how to accurately respond to this – until now. You see, I ran across a pic of Al Gore and it hit me like a bag of bricks – go to the internet and share! Thanks, Al.
It all started when I was painting my house. You go to the store for supplies and you’re inundated with new, better tools to save you time and money. Hey sounds good, so off I go with a new edging tool on Friday thinking I’ll be done on Saturday. On Wednesday, I realized instructions don’t quite replace actually doing it. If only I could share my experiences about this tool, re-write the instructions, add useful photos. if only….
Well, it got me to thinking about what I do in China. I get people coming to me who’ve metaphorically read the China instructions, followed the directions, applied their own experiences and still ended up in a big mess. They ask what did I do wrong? What mistakes did I make? What went wrong when I picked that shiny new tool off the shelf called “China”?
I always appreciated the way my father would succinctly put life’s lessons into a neatly packaged adage. Something you could easily remember and relate to for years to come. With this in mind, here goes my first ever blog. I plan on tackling an adage a day and I invite anyone out there to add to the list. Check back every so often to catch the latest and greatest in this fun experiment.
Lastly, bear with me on the technical side of posting this…..Senator Gore did not return my calls on how to make this all look good.
Adage #1: You don’t build a house with a Leatherman®
No 1 factory can do it all in most cases. Trying to build up the value-chain, you need more than 1 factory to efficiently make it sustain, keep costs and quality in line. Now, before I get rebuttals about this not being true, let me explain. Yes, factories need to eat and by combining all your processes into 1 factory, you can sometimes get better value-add/pricing and a good command central while keeping your supplier(s) happy. As you’ll soon learn through my blog, there is no one-size-fits-all for China. You need to know your products complexity (multiple processes?), cost (low commodity – expensive technology?) and content (marketing – patent?). Obviously, if you’re making pens or wiffle balls, yes, 1 factory will suffice. But if you’re in a medium tech, medium complexity, patented or intellectually sensitive product field, 1 factory doing it all is risky. You can better protect your IP and control costs by being your own manager of resources. It’s not as overwhelming as it may sound, gives you better protection and the upside is great. By splitting up the processes, you keep your complete IP in check (no 1 factory knows the secret ingredients) to your product.
Real World Example: Our client came to us with a patented light bar assembly and was worried about giving the technology away to China. We put together a plan to utilize contract manufacturers, gave them the individual parts and requirements and had all 8 suppliers (extrusions, wiring, LED, plastic injection, circuit boards, etc) deliver to our in-house controlled assembly factory. With a strong assembly factory relationship and QC checks (trust but verify) the client lowered their product costs by 40% and kept their IP safe.
Summary: Are you going to be Cpt. Kirk and take the helm – or leave this to your resource?
Posted by Joel Buckley
Specialized in product development, sourcing, marketing and branding