Question: “Our company is considering outsourcing some of our production items to China. We have heard about the low cost structure, of course, but have also heard about some of the difficulties others have experienced. What would you suggest as a starting point for this process?
Answer: “First, consider getting some assistance. Remember that it is not like domestic sourcing, where you just put out an RFQ and wait for some responses. And it is not just about the unit cost. Companies that succeed with China outsourcing either engage long-term support, have the ability to provide in-country support themselves, or add indirect staff (read: higher overhead costs) to provide “liaison” with Chinese vendors. There are, as we have indicated above, ongoing translation and other issues. Don’t just assume that the vendor will be fully English and western business practices oriented. The ideal is someone who works for your company, or is a 3rd party who works for your company, and also has permanent in-country resources fluent in Chinese language, culture, business practices, your technology and the government.”
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