Most Common Overseas Manufacturing Challenges

Overseas manufacturing, especially with the right partner and supplier, is one way to increase your company’s strategic advantage. Today, companies around the world continue to explore moving all or parts of their supply chain to global partners.

However, it’s more difficult than ever to keep your supply chain running smoothly. There are several different challenges that you can face at any time. Here are the most common challenges that North American companies face with overseas manufacturing.

1. Cultural and Communication Differences

For any successful manufacturing supply chain, partners and suppliers need to have timely, clear, and concise communication with each other. The internet makes it easy for suppliers and vendors to find each other, but underlying cultural differences still exist and the results of these challenges often surface too late.

Email is an easy way to get your message to the vendor while you are working and they are not, but interpreting the email and responding in a way that satisfies you and your business can be extremely challenging for your vendor, and immensely frustrating and costly for you and your business.

Communication goes beyond being able to translate or speak and understand a different language. It means understanding the cultural background and nuances of a particular people and country, as well as how business is conducted in the region. Without that, even routine communication about material specifications or production schedules can lead to misunderstandings that wreak havoc on your operations, potentially leading to delayed production or shipping times.

It takes years of experience, time, and patience to overcome cultural differences with an overseas vendor.

Learn more about effective, real-time communication avoids shipping confusion and issues.

2. Financial Issues

Commercial terms and related details such as deposits, who is responsible for what expense, and when payments should be made are some of the financial issues that must be agreed upon before production can begin.

Tooling investment and associated terms are often unique to a specific region. Knowing whether or not tooling is subject to import tariffs and how to properly account for tooling in your financial models is another overseas manufacturing challenge that businesses face.

Requirements such as minimum order quantity (MOQ) can be confusing, and may vary significantly depending on the vendor and region of manufacture.

3. Quality Control

Quality control can make or break the success of a business. But communicating and verifying quality standards in a facility overseas is hard.

Once a shipment has been produced, shipped, and arrived in your warehouse, it’s too late to begin the inspection process. The farther away from the factory a shipment is, the more expensive and time-consuming it is to correct an issue.

No one wants an unexpected surprise when the first shipment of your product arrives. Learn how to ensure quality products every time.

4. Staying on Schedule

No one benefits when production schedules are not managed to meet your company’s needs. Finished products arriving late or early can create a variety of potentially expensive storage and distribution issues.

With so many moving parts and suppliers, you need visibility into your supply chain at any given moment to know the status of products, expected shipment dates, delayed shipment reasons, inventory levels, and more.

Without visibility, you’ll be stuck guessing about your production planning, inventory management, and shipment scheduling.

Learn more about how ITI can send you detailed and specific updates every week about the status of your products, orders, and shipments.

5. Managing Unforeseen Issues

Issues can and will arise in any manufacturing operation. Trying to resolve issues quickly and completely becomes even more challenging when your manufacturing is done overseas. Without local representation, there will be delays in communication that further magnify the stress of the situation.

In order to effectively resolve issues, you need a manufacturing partner that takes ownership of the problem and works tirelessly to resolve it to your satisfaction. 

Unfortunately, that’s not the kind of service you’ll receive at most overseas factories. That’s why manufacturing management firms like ITI exist – to help bridge the gaps and resolve issues while still providing the benefits of manufacturing overseas, like lower labor costs and better manufacturing infrastructure.