Outsourcing is a common business practice that involves relying on third-party companies to perform specific processes and functions. China is a popular country for outsourcing manufacturing. With this practice, you could gain a competitive advantage when it lets you save money and produce results more efficiently. Even the most established companies and discerning startups are outsourcing manufacturing to China because they already know the benefits of doing so.
However, it’s not all the time that you can experience success in outsourcing. Since you’re relying on another business to perform critical tasks for you, you could lose control over the vendor and end up with an unreliable manufacturing company. Knowing the risks in outsourcing manufacturing to China can help you avoid them and guide you into hiring only the most competent and trustworthy manufacturers.
Why is outsourcing risky?
Outsourcing your manufacturing overseas is potentially risky because you’re not physically there to oversee the process and verify what the manufacturer is doing. There’s a chance that your project could fail because you cannot personally manage the process. You can’t be too sure about the quality of the results, too, and it can be frustrated to receive faulty or low-quality goods that you have already paid for.
Risks of outsourcing to China
Before you decide that outsourcing manufacturing to China is for you, recognize that it is not a fool-proof solution and that you have to be aware of certain risks, which require mitigation. One of these risks is supplier negligence, which occurs when you are working with a manufacturer who never truly had your best interests. It can be frustrating when the manufacturer itself is causing disruptions in your operations when they fail to follow through and give updates.
Mitigate negligence
Open communication with the manufacturer is recommended to mitigate their negligence. It’s also advisable to visit the factory and verify the manufacturer’s reputation and quality of service by checking with other businesses that have previously hired them. You might want to hire a China-based western-owned and managed manufacturing and supply chain consultancy firm that offers quality control services to verify the factory and its processes for you.
Intellectual property
It can be worrisome to outsource manufacturing when the IP laws in another country are not as stringent as they are in yours. You could mitigate this risk by looking up and verifying the reputation of the manufacturer and finding other companies that could vouch for their ability to protect intellectual property rights.
Quality assurance problems
Another risk of outsourcing manufacturing to China is the lack or absence of quality inspection and assurance. In some cases, the manufacturer’s quality control standards don’t align with yours. Poorly produced products could negatively impact your brand and disrupt your operations.
Avoid QA problems
You can avoid quality assurance and quality control issues by hiring a third-party quality control inspection service. They offer a wide array of solutions such as pre-production and in-process quality control inspections. You can also rely on them for container loading inspections to make sure that the goods you ordered are properly loaded for shipment.
