Troubleshooting can be a more efficient and simpler process when you’re on the factory floor. Tweaks can be discussed, implemented and tested in real time which can make for a more efficient process.
Undoubtedly, the pandemic put a damper on our first tip. We’ve found that the simple act of frequent site visits puts you on the front line of production, inspection, negotiation and importantly human relationships.
The factory is so much more than just a place of manufacture, it’s a complex ecosystem which is where products are made but also where strong relationships are formed. Coming face to face with the humans behind factory operations can only help in forming strong bonds which is a powerful asset, when it comes to managing production offshore.
You’re able to see production in real time and have the ability to search for points of optimisation which can help to cut costs and in turn benefit the factory as well as your bottom line.
Troubleshooting can be a more efficient and simpler process when you’re on the factory floor. Tweaks can be discussed, implemented and tested in real time which can make for a more efficient process.
Do your research and ensure that you are aware of the compliance requirements specific to your product and industry.
With ever-increasing regulatory standards and testing requirements across industries, it is imperative to partner with a factory that understands the importance of these requirements in your market. Moreover, your chosen partner should have the requisite experience in implementing quality assurances processes and is able to issue you with factory audits. You should be weary of any delays in providing audit reports or an unwillingness to share them as these could be red flags. Some factories avoid audit reports if they have compliance concerns or want to avoid the cost of procuring audit reports. If this is the case, we recommend that you consider finding a new factory partner.
It can be a daunting process when trying to select the right factory partner particularly when you’re just starting out. Recommendations from your network are highly recommended, particularly if they are using or have used the same factory partner.
Do your research and ensure that you are aware of the compliance requirements specific to your product and industry. Clearly communicate your QA requirements to your factory partner and ensure that they are following this closely and conduct spot checks while you are at the factory. If you can time your trip to align with a production run, that would be ideal.
Your factory partners are critical to your success so it is important to understand their culture and make a concerted effort as this will only benefit all parties in the long run.
Dealing with people from around the world is exciting and dynamic. However, it does come with its own unique set of challenges. We recommend that you take a proactive approach and research some of the cultural differences that you may encounter during dealings with factory partners. Cultural differences affect global businesses in three main areas – organisational hierarchy, etiquette and communication. Identifying and understanding the impacts that these can have to your business will avoid misunderstandings with your factory partners.
For example, when you’re doing business in China a way to develop relationships is to spend time together socialising, eating and drinking. This is a means by which to gain trust with the other party and this is important part of doing business. The Chinese call this guanxi (关系). Guanxi refers to having personal trust and a strong relationship with someone. Further, it can involve moral obligations and exchanging favours. Building guanxi is a long-term approach and can be achieved through a variety of ways for example:
Your factory partners are critical to your success so it is important to understand their culture and make a concerted effort as this will only benefit all parties in the long run.
Culture can influence the way people think, communicate and behave. As such, t's imperative that you take the time to understand the culture of supply partners.
Closely tied to cultural differences is negotiation. Culture can influence the way people think, communicate and behave. These characteristics are reflected in the manner that individuals negotiate. As negotiation is such a critical aspect of business it is a necessity for companies to not only understand these differences but also to work out ways to mitigate any hurdles that these differences present. Importantly, preparation is an essential part of any negotiation as such understanding the cultural differences can be considered a part of the preparatory work that you would understand prior to commencing a negotiation. There are three key guidelines from the The Program on Negotiation which can help with managing cultural differences in negotiation and reducing cultural barriers:
1. Research the whole person – In addition to learning about your factory partners’ culture, it is also important to learn about them as an individual. Where have they worked? What skills do they have? What is their reputation like as a negotiator? You can glean such information from LinkedIn, people in your network as well as getting to know the person over the phone or face-to-face. You may discover that your factory partner has been formed just as much or more by their personality, experience and profession as by their nationality.
2. Negotiate like a diplomat – Think beyond the stereotypes and about the broader context of your negotiation. Diplomats need to consider broad issues that relate to the negotiation such as changing politics and laws of the region. We can apply this thinking broadly within the context of an international negation and move beyond stereotypes.
3. Take the pressure off – Columbia University professor Michael W. Morris has stated that negotiators are likely to adhere to cultural stereotypes when facing demands on their attention including time pressures. When we resort to stereotypical thinking, there is a tendency for careful analysis to be discarded. We should aim to encourage deeper thinking by removing stress from the negotiation process by taking breaks, getting to know the other party and ensuring deadlines aren’t too tight.
The relationship that you cultivate with your factory partner can be considered one of your strongest business assets. Nurturing a relationship that is built on mutual trust and collaboration will set you up for success. We view our factory partners as extensions of our business. We trust them with confidential information like our IP, we rely on them to produce high quality product, adhere to quality assurances processes and measures, implement continual improvements, stick to timelines and more. As such, the relationships we form and grow are key to our business success. Take the time to get to you know your factory partner, their culture and invest in the relationship and from our experience your business will reap the benefits.
