China is the world’s factor. Almost a third of all manufacturing in the world takes place in China, substantially more than any other country. Businesses in China offer high quality, competitive rates, and fast service. China has achieved this status through a decades-long effort to support a robust export economy. In that time, Chinese businesses have become experts in clothing, plastics, electronics, and metal pressing.
Still, outsourcing your production is a challenge. Any business owner or manager wants to have control over their products. This is especially true in metal pressing, where poor workmanship can lead to problems down the supply chain which are expensive to fix. It is best to find a business partner you can trust.
Do you want to have metal pressing done in China? Before you take advantage of this great opportunity, there are a few things you need to know. Here are five topics to consider when metal pressing in China.
Expertise and Production Capacity
Before you even start looking for an outsourcing partner, you need to know your requirements. What are the specifications of your part? How many do you need? When do you need them? These questions may seem obvious, but some companies will attempt to identify a manufacturer before making all the relevant decisions about their product.
You don’t need to have a complete and final answer on your production process, but there are several advantages to partly answering these questions.
- Narrow down your search: there are a lot of companies doing metal pressing work. Sorting through all the possible businesses to work with is a massive undertaking. If you understand your needs, you can focus on manufacturers that specialize in your area. It also allows you to eliminate companies that cannot produce your part.
- Asking better questions: discussing your part with a prospective manufacturing partner involves many questions about the process, equipment, and experience. If you understand your needs, you can ask better questions in your initial conversations. Obviously, you can come back later to ask more questions, but it is best to work out as much as possible early in the discussions.
- Better negotiating position: when you get to the point of discussing a contract, you need a clear understanding of your requirements. What points are negotiable, and which ones aren’t? Are you willing to relax the specifications in exchange for a price cut? What production schedule do you want versus what production schedule do you need?
It is also important to discuss production capacity. Factories only have a limited production space, so just because they can make your part doesn’t mean they can make it right now. You don’t want to be surprised if your business partner is overbooked.
Connections with the Government
Doing business in China is quite different from the West. Many of the norms that are well-established in North America and Europe are not followed in China. This partly has to do with the culture, but the country’s economic history is even more influential.
China’s economy has only opened up in the last couple of decades. Before then, most companies were state-owned. Rules around business ownership and the role of the government in business have changed over the years. Many companies still maintain very close ties with the government or are partly owned by the government. The state has a much more active role in the day-to-day affairs of Chinese companies than we are used to in the West.
Government ownership is not a problem, but your company should be mindful of this connection. Your company should maintain a strong relationship with government officials. On the other hand, developing a solid relationship with your client may create opportunities to generate business deals with the government itself.
Location of Suppliers and Downstream Manufacturing
Very rarely are companies looking for an individual piece. Most companies want a manufactured product that is made from many parts. These articles are often assembled in China, along with any fabric, plastic, or electronic components. Shipping between different sites can become expensive and logistically complicated, so locating your factories close together will save you money and effort in the long run. This becomes particularly important when building complex products such as cars or electronics.
Luckily, China has regions with intense industrial activity. Guangzhou is one area that is known for its manufacturing. Not only is it rich with experienced manufacturing companies, but it also has ready access to one of China’s largest ports.
Related to this topic is the possibility of manufacturing multiple parts at a single location. Co-locating different parts at a single facility will reduce your shipping and decrease your audit expenses. You also have the possibility of negotiating a deal to lower your costs.
Audits and Inspections
If your product breaks or stops working because of quality issues, that is a massive problem for your company. While nobody likes auditing, it is necessary to avoid products down the line. You need to ensure your overseas partner operates their plant according to best practices and that your parts are up to specifications. There is no way to verify this without an audit. These audits can either be carried out by one of your employees or through a third party.
Auditing can be a big undertaking, so you need to be strategic about how you implement them. Your audit schedule should take into consideration the complexity of the part you are having manufactured. Is it a small part that plays a pivotal role in an electronic device? Is it a critical component in a car’s steering or braking system? Parts like these have much tighter specifications, so you will want to schedule more frequent inspections than less specialized pieces.
Your auditing strategy should include both a schedule and a plan for how these audits will be conducted. Do you want to send a representative from your company or hire an outside firm? This will partly depend on your in-house talent since you cannot effectively inspect a company if you don’t have expertise in the area. Expenses are also a concern, as auditing can become costly if you are using a large team.
Audits are not just a cost for you. They also cause stress and can interrupt the work of your business partner. Come up with an audit agreement ahead of time to ensure your manufacturing partner is comfortable as well. Just make sure your communication is clear and open.
Contracts and Legal Agreements
Contracts are like the skeleton of the business world – they keep everything connected, in place, and secure. Before selecting a company to work with, make sure you spend time developing a contract that fits the needs of your business.
Some of the questions you need to address in a contract include:
- What is the delivery schedule?
- What happens if there are production delays?
- Who is responsible for shipping costs and logistics?
- When will payments be made?
- What is an acceptable rate of defective parts?
When doing business in China, you may require Chinese-language contracts. Your potential Chinese business partner can often draw up the contract, but you will need to work with your legal counsel to understand what it means. This isn’t about a company trying to cheat you, but it is about clear communication and responsibility; any detail that isn’t worked out ahead of time can cause problems.
Beyond the formal contract, it is also helpful to understand what your business partner is looking for in the relationship. If they are hungry for extra business, you can introduce them to any business connections you have that might be interested in their services. Suppose they want to gain prestige by being associated with a North American firm. In that case, you can volunteer to provide a testimonial or collaborate on marketing materials. Your connection to the Western business world is an asset, so you should try to make the most of it.
Related to contracts, you should also look into any regulations relevant to your work in China. Depending on what you are manufacturing and how your supply chain is arranged, you may be required to file additional regulatory papers with the government. These regulatory filings often need to be in Chinese and can be time-consuming to put together. Do your research ahead of time so you don’t run into problems once your project is underway.
Gold Precision – Your Partner for Metal Pressing in China
Still not sure if manufacturing in China is right for you? Talk to our team at Gold Precision. We have been offering metal pressing services in China for over 20 years. Our experts will walk you through the entire process and ensure you receive the service your company deserves.
Our state-of-the-art facility is set up to manufacture a wide range of products, and we are always excited to work with new clients. We are leaders in custom metal stamping. Just select your material, size, and tolerance, then share your requirements, and we can provide a quote!
