Taming the Dragon

Article published: May 2007

Nick Jones offers his advice on working with Chinese suppliers.

China, a country shrouded in mystery, with a civilisation stretching back thousands of years is famous for its huge manufacturing capacities and cheap labour: both important considerations for a product based company in the modern economic climate. Setting up a manufacturing facility in China can be an exciting, rewarding and financially sound decision. However, like all long distance relationships, there can be communication issues, confusion and a feeling that you don’t quite know what is happening when you aren’t there!

We have been using Chinese suppliers for years now and believe we have finally “tamed the dragon”. When we entered the events industry 12 years ago the only conference bags available were poor quality bags, mass produced in Government controlled Chinese factories. We were confident that UK organisers would welcome premium quality bags, designed and manufactured to meet their needs. This defined our mission.

We knew we would have to establish our own manufacturing operations and China was the obvious solution, so we headed for Canton, former capital of China. At the Canton Fair we met many factories before touring premises and discussing business with the management. Over time we have learnt that this is the single most important phase of business in China – get to know the management, understand their abilities, skills and shortcomings.

Some of the factories were shocking and it was clear that many of the people we met had no concept of standards or knowledge of management skills. Others looked and sounded great but disappointed in the long term. We, for example, eventually found what we thought was a modern, high quality factory with good ethical standards and university educated management; along with our own controls we felt the supply would be reliable.

We soon learned our mistake! We were dealing with a Government controlled export factory, something to be steered away from at all costs. There are three major problems with these organisations (although they can apply to private factories): the underlying quality of the factory; the quality of the suppliers they rely on; and the ability of management to meet deadlines.

From the quality point of view I felt I was dealing with a “cheaper is better” culture. In their opinion, if they could make it cheaper they would win business. Instead, this just creates a glut of poorly manufactured goods using inferior materials. They seemed unaware that you can substantially improve quality for very little cost and were unprepared to do so for fear of losing business.

I have also noticed a lack of customer commitment and integrity from some factories. A factor which posed problems for us in the early years - when a shipment date was agreed we would expect it to be met. Unfortunately this was not always the case, if a factory was offered a large order from another customer the management would delay to accommodate the bigger client. I still hear stories where goods are promised but become delayed. The old favourites are to blame the shipping line or customs. These stories can be easily verified! 

And the problem gets worse when unscrupulous suppliers promise goods on a tight deadline. “Normal” production time in most Chinese factories is 45 days. Once you add transit, including shipment by sea of 21 days and customs, the total lead time from order to delivery is around 10 weeks. There are ways of speeding up this process but time frames are entirely dictated by suppliers, even with controls in place. Any organisation which promises a lead time of less than 8 weeks is playing with fire.

But enough of the negative, bleak picture I have painted above. Many of these problems are inherent in factories and supply chains the world over and if it was always as bad as I have suggested, I wouldn’t be using the same suppliers.

Over time we have developed an extremely reliable and high quality operation, which has been in place for over 10 years and enabled us to supply the biggest world events including 26,000 bags for the World AIDS Congress in Toronto.

And this improved situation hasn’t just been due to our hard work, China is also contributing to smoother trading relationships. In recent years, as markets become more international, many Chinese organisations are travelling overseas to win new business. As they do so, they become more and more acquainted with western business ethics, which will certainly make life easer for many people. The Chinese market is also beginning to better understand our business needs as they try to bring in ethical and organic goods. The progress for such goods however is a slow process. A recent fair for example claimed it was dedicating a section to “green products” when the reality was a few stands offering goods of which most would not meet western CSR criteria.

Ultimately, for those venturing into China for the first time there will be pitfalls, time and patience are the key to success. Taming something as small as a mouse is fairly easy, a dragon takes a little more time, effort and even a little bravery.

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