Most Common Overseas Manufacturing Challenges

Learn about these overseas manufacturing issues, and when to seek help.

In the 1970’s and 80’s companies focused on their core business by identifying critical processes and deciding which could be outsourced.  Around 1989 the term “outsourcing” was identified as a business strategy.  Today, companies around the world continue to explore their options when it comes to overseas manufacturing.  It’s important to find new and innovative solutions to increase your company’s strategic advantage.  Overseas manufacturing, especially with the right partner and supplier, is one way to accomplish that goal.

Recognizing there are classes of materials and products impacted by recent tariffs, offshore manufacturing remains one of the best options for US companies. In this blog, we will discuss six common issues with overseas manufacturing.

Cultural and Communication Differences

Similar to people in every country, Americans have unique core beliefs based on our upbringing and history. Language differences can create issues that must be overcome for effective communication.  This goes beyond being able to speak a language. Communication also means understanding the cultural background and nuances that differentiate peoples of different countries.  For example, basic methodologies and the traditional etiquette of business is significantly different in China than in the US.  Misunderstandings and unfulfilled expectations are frequently the results of these cultural and communication differences.

Financial Issues

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 long before a manufacturing agreement is finalized.  Issues such as minimum order quantity (MOQ) can be confusing, especially when it’s required that more raw materials be purchased as compared to what’s needed for a particular manufacturing run. This confusion is due to the differences in the MOQ of the producing factory and their material supplier(s).

Quality Control

Outsourcing the manufacture of a product can be a dangerous and expensive proposition if there is no assurance of quality control.  Once the shipment has been produced, shipped, and has arrived in your warehouse here in “the states” 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.  Reliable quality control at the factory level as well as the verification of raw materials is essential when sourcing and choosing overseas manufacturing.

Staying on Schedule

No one benefits when production schedules are not managed to meet a U.S. company’s needs. Finished products arriving late (or early) can create a variety of potentially expensive storage and distribution issues.  On-time production and finished product shipping from the factory and arriving at the intended destination in a timely manner is critical to success.

Managing Unforeseen Issues

Components that are delivered late, incorrect components or materials delivered in error, a sub-contractor applying and incorrect color of powder coating, retail box artwork is printed incorrectly; these are a very small list of what can happen thousands of miles away in another country during the manufacturing process.  No different than some of the manufacturing and logistical issues here in the US, every step in the overseas manufacturing process must be carefully monitored.

Not Having a Manufacturing Partner

The art and science of successful overseas manufacturing is a combination of the successful management of ALL the small steps that must be managed.  Some companies are fortunate enough to work with a manufacturing partner who knows the ropes. Some even have an established track record for experience and manufacturing success, and knowledge of China’s manufacturing landscape.  Yet, many do not.

If you are unsure about taking full responsibility to successfully replicate your product in China your best course of action is to contact ITI Manufacturing. You can take advantage of our 40+ years’ experience, our full-time China staff, and our no manufacturing defects guarantee. THEN you can be sure.

There is no need to take a chance.  Speak with one of our experts today. Call 888-574-6823.

With ITI, you can achieve supply
chain predictability, visibility, and accountability.

Contact ITI to learn more information.