What happens after the show?
A guide to making your trip to Asia pay off.
Part I: Critical Data Analysis
You have been to a trade show in China, Hong Kong, Taiwan or Thailand or somewhere else in Asia.You met scores of factories and reps that say they can help you out.Your mind is filled with new ideas and the possibilities seem endless.Maybe you ate some mystery meat and are not too excited to go back.Maybe Asia's exoticness has piqued your curiosity.Maybe you are a veteran of foreign trade shows and are used to it all or are tired of the flight.Regardless, you now have the task of turning those new possibilities and contacts into saleable products and real dollars.What do you do first?
Since you have a pretty good idea of what you want, the issue now is getting it.Since you went to Asia once already "going native" won't hurt you again.So we'll couch this in a little local wisdom.Buddhism teaches that you have to be "right" to achieve Nirvana.And since international project management can be both an enlightening or hellish experience, here are some tips to help you get into the "right" frame of mind.
Talk to the right people.
First things first: know ahead of time who you are going to be contacting and working with once the show is over.Are you ordering off the shelf or doing original design manufacturing (ODM)?For off-the-shelf orders you may be just fine working with a salesperson.But for custom projects, it is best to work with an engineer (and they don't go to trade shows).For either option you will probably be working through a salesperson at some point.And it's scary, but true, that salespeople usually know very little about the production process.Furthermore, most English-speaking salespeople are hired for the tradeshow only.Very few factories in China have fluent English-speaking staff on hand full time.It is quite typical for one or more of the salespeople to be able to read and write some English, but spoken English is usually very limited.
More commonly than hiring their own staff, a group of factories will work together with a local trading company that has English-speaking staff and maybe a foreign liaison office.The trading company will get a cut of the business to facilitate the communications and guide you to factories with which they have the best opportunities, best production experiences, and best relationships.
So do you know who you are talking to?A salesperson?A sales manager?An engineer? A member of a trading company?Whoever it is, make sure that they are the right person for your type of project.The right person is the one that both understands what you want and can help answer your questions about getting it.That right person, if you are doing custom orders, is an engineer-he should be able to answer all your questions and talk with you knowledgeably about the production process.The truth is, your engineers probably can't speak English, but you will want your information to pass through as few hands and mouths as possible before it gets to the engineers.Take as many precautions upfront as you can to make sure that accurate information is getting to the engineer in a timely fashion.
By nature of our foreign staff and local on-the-ground experts, SRI is better to work with than going directly to the factories.First, SRI's foreign experts can by-pass the sales office and work with the engineers and the managers directly.This means you are getting direct communications and a better price; there is only one translation of information and it's firsthand-from SRI to the engineers.And most importantly, a good long-term relationship is the best protection for your products and intellectual property.SRI has ongoing relationships with scores of factories that are more valuable than your individual project, thus keeping the factory "honest" and committed to our long-term relationship.
Say the right things.
- Now that you know who you are talking to, what do you say?Obviously, more information is better than less-you don't want the factory to have to guess, trust us on this one!You need to get the factory (the engineer specifically) complete details of both how to make your product and what, if applicable, it will be used for/with/as part of.This means the factory needs everything.Every detail you can think of and some that you might not have yet: drawings, samples from previous production runs, similar products, sample parts, etc.The more you can give them, the faster the process can be completed and the less opportunities the factory will have to substitute or guess.
It is worth it to pay for some three dimensional CAD drawings to be made if you are making a new product.You can do these on your own, if you have the facilities.You can also hire out to a design company or have a trade company do it for you.CAD drawings in the United States usually cost around $50 an hour to make.SRI has professional partners in Asia that can do the technical drawings for you for much less than it would cost to have them done in the United States.
In addition to being specific on all the product details, you can specify some of the process details.Identify for the factory the points that caused difficulty in prior production runs, or unique processes for color or construction that you are aware of.Specifically note when in the production process you will need samples, what you would like to QC yourself, and which specific items need to be approved by you before production can move forward.These checkpoints become important milestones in the production process that let you participate and know about production schedules and quality prior to the end results.
We know what to say and to whom it should be said, but the tricky part, where culture comes in, is how and when to say it.For more on this, read Part II of What happens after the show?A guide to making your trip to Asia pay off.
Part II: Effectively Communicating Standards, Expectations and Quality Issues
We know that the devil is in the details and we know we're talking to the right guy already, but how do we say it so he understands?We're both speaking the same language, aren't we?Probably not.
Say the right things in the right way.
Just because you and your factory are both talking about oranges, for example, doesn't mean that you understand each other (e.g. in much of Asia, oranges are green on the outside).Knowledge of the culture you are going to be working in/with can be an invaluable tool for relieving frustrations and preventing miscommunications that are an inevitable part of any production process.Here are some quick hints that may help you say things the right way in Asia:
First and foremost, understand that business culture in Asia is based on relationships, not efficiency, so be ready and willing to talk about "personal" issues before and after business.For example, a good first business meeting in China might include any or all of the following: business card exchange, tea, cigarettes, dinner, some background on you and your family, politics, some drinks, a cultural introduction, karaoke, and finally, some business thrown in because they know that's what you expect.Business is usually conducted after a personal relationship has been established and toasts have been drunk.In-and-out-o-a-tight-schedule Western style efficient business meetings hurt relationships more than they facilitate business over here.So just be prepared to spend more time than you would if you were working with a factory in a Western country.
Why are relationships so important to business?Relationships in Asia take the place of the legal system in the West, assuring payment or resolution if there are problems.In the West, time is money, because you have a legal system to enforce laws, standards and contracts.But in much of Asia, relationships are money, because there is no one that can or will help you out if a project goes bad.It's much harder for family or friends to run away from obligations than it is for strangers.
Second, Asians typically talk in "circles" while Westerners more often talk in "straight lines."Ask your Chinese manager about a production problem and you might get a story that may not seem to answer your questions.Chances are you will get more personal information that you are interested in.Direct yes and no answers are difficult to get.This is such a common issue that books have been written on this very topic.But the whole story, including, for example, the part about him staying out a party too late last night so he couldn't finish your project this morning because he was hung over, is to him a relevant and important part of the answer (and was actually the answer I got from a factory once!).So be patient.
Westerners are direct because business is impersonal.But in Asia, where the infrastructure can be undependable and the political/legal environment is often underdeveloped or instable, being direct, or working without a solid personal relationship, can be not only difficult, but even socially dangerous at times.
This does NOT mean that relationships are the answer or are more valuable than a good contract and a lot of research.They are not.They can help but they should never be the deal breaker.If you are being promised that someone's relationship will see a problem through-don't believe it.You need to spend more time on your personal relationships with the factory than you would in the US, true.But don't rely on anyone's connections if your money is involved.
Third, remember that good quality at a fair price is the goal of all involved.Even though communications may be different or even difficult, the end goal of each party is the same.So patience and understanding on both sides are necessary.Also, "quality" and "fair" are relative words-each side of the transaction understands them differently.China has openly promoted the idea that China has been humiliated by the west for one hundred plus years and that the West "owes" China or that China has the right to "take" from the West.To many, this is fair.So spend (copious) amounts of time negotiating prices.
Finally, what is the best way to put all of your new cultural understanding and detailed process instructions to work?Well, you went to a trade show in Asia for a reason-seeing things yourself and face-to-face communications work better.They just do.And that's what will work best again.Whether it's the body language, the sitting around a common worktable with the same samples, or just the personal touch, we all know that face to face is the best way to communicate details.And that doesn't end now simply because you have chosen a factory with which to work; rather, the most important discussions you'll have are still ahead.
Today's technology makes it possible to email information almost instantly and video conference with almost anyone in the world.Internet telephony, color faxes and file sharing all make international project management easier.But try to manage a project without some direct contact (even down the hall, let alone halfway around the world!) and you will soon see that emails, faxes and phone calls are just not enough.Then throw in English as a second or third language, just for fun.
For sixty to seventy percent of your project, barring any disasters, long-distance communications via modern technology will probably be enough.But you need to either have someone on the ground for you or plan on at least one more trip before you approve product to be shipped.If for no other reason than dollars and cents it makes sense to hire someone in Asia or make another trip.A ten-day $3,500 trip to Asia can be well worth it when you are spending $25,000 to $250,000 or more on product, especially if it makes all the difference in getting the product right the first time, which is always worth it to your bottom line.
If you don't want to or don't have time to go back to Asia, there are many QC options for you; everything from working with SRI, to hiring a 3rd party quality assurance (QA) firm, to just trusting that the factory will get it right (not recommended!).To determine which option is best for your situation, you can add up what it would cost you to receive late or incorrect product (in terms of real dollars, opportunity costs, and customer relationships) and then compare that with the price of another trip to Asia or the cost of hiring someone else to do QA for you.
SRI includes QA services for you as part of their initial bid on your project.You can never underestimate the value of having someone on the ground if there is a problem.It's trite but true-it's better to be safe than sorry.
You're talking to the right people in the right way about the right thing.Everything is going well (this isn't so painful, is it?).And then it happens.The dreaded call-"there's a problem."What do you do?Short of jumping on the first flight to China, what are your options?For the answers and next steps read Part III of What happens after the show?A guide to making your trip to Asia pay off.
Part III: The right way to deal with problem
We all know what happens to even the best laid plans of mice and men.More often than not, they go awry.So be ready.Understand and prepare for eventual problems-they will happen.But there is no need to call off the whole project just because there may be some difficulties.You would have problems in your home country too; it's just that when it is closer to home, it doesn't seem as scary.
So besides hiring SRI or a QA company to monitor the entire project for you, what other things can you do to deal with problems?As we mentioned before, being specific, patient and well prepared will help for sure.Part of that preparation is to have a second factory on hand and ready to go.
Pre-qualifying more than one factory can turn out to be a valuable resource for you as your project progresses.In the beginning you can compare prices, quality, management, service, etc. between the various competing factories.You can also choose the process and people you feel most comfortable with.Later on you can use a second factory to double-check additional costs that may crop up.And, if something goes terribly wrong, you have a second option already in queue to fall back on.SRI always qualifies multiple factories as part of our bid process-we make sure that safety nets are built in from the beginning.
In-processQC (IPQC) is another mandatory part of the problem solving process.Regular and detailed QC assures you that you'll find problems before they get to crises level.It also gives the opportunity to change, adjust and tweak things before they are completed.Probably most importantly, it gives you peace of mind.
In addition to IPQC you should plan a second (or third) trip to visit the factory for final approval of product before it is shipped is certainly an option.SRI can do IPQC, spot and final QA for you. Knowing that SRI will be on site through out and/or that you will be back will help the factory understand your expectations.An onsite QA like SRI also provides you a safety net in case production is not as good as the samples you received in the mail (and chances are high that this will be the case).
If you are chronically independent, even something as simple as having a friend in China can help you out.If you know someone in China that lives close to your factory or if are doing projects with another factory close by, see what your local contact can do for you.It never hurts to have someone stop in and check on things that you can't see via email.Of course this isn't the best solution, but it could be a stop-gap if you are determined to do it on your own.
So what happens if everything falls apart and the factory gives you the options of buying bad product, walking away and losing your deposit or going to court in China to get your money back?(And yes, this does happen, even with contracts.)First, understand that satisfactory legal resolution in China is very rare.And while the legal system is certainly getting better, it is still very young and rarely decides in favor of foreign interests over Chinese.Without prearranged legal representation, a great case of clearly fraudulent activities and/or at least hundreds of thousand of dollars on the line, you don't want to go to court in China; the odds of having it pay off are slim to none.
If things do go south you don't want to walk away from your time and investment and you just can't accept bad product.So where does that leave you?It leaves you to work out an arrangement with the factory either by yourself or via someone else.In our experience, most difficulties are really just individual cover-ups for mistakes or misunderstandings that can, with patience, be uncovered and resolved.For you, that means that there is hope-opportunities to save the project with a little more patience and a healthy dose of Sherlock Holmes.
Most of the major problems we have seen stem from either misunderstanding or individual mistakes rather than dishonesty.So look for problems and resolutions, not blame.Also Asians in general and factories in particular hate to give you bad news.They just don't want to do it.Doing so defies their cultural teachings of face and luck.Often, when a project is so far down the road and problems have not been discussed, it becomes do or die.Saving face is a bigger issue than you may understand at this point-we have seen mangers try to kill projects rather than admit that they made a mistake.But chances are the issues are not as dire as they may appear.Again being on the ground yourself or having some here to represent you helps catch problems before they get to this point.
So, keeping good records, following paper trails, clearly explaining expectations, maintaining regular and consistent follow-up, aiming questions at discovery rather than accusation, offering solution-oriented options rather than vindictive and limiting choices will help you to get to the bottom of the real issues and most likely save your project.Remember, like you, the factory has already spent much time and money on materials and is more than likely committed to making the project a success too.They don't want to lose money, face or a customer either.
No two ways about it, this is full time project management-in a foreign language and without the ability to see things first hand.If that scares you, and it should, you need to seriously consider sending your own full time employee to China (must be fluent in Chinese) or hiring SRI or waiting until you can find a better set of circumstances.
Shipping your products
You've almost made it, now.You've successfully navigated the overseas production process and you are now ready to ship your products.At this point you need to be talking with companies in your home country as well as in the country of production.The best advice we can give you here is to know your options.Talk with as many companies as possible and find out about all the fees, services and time constraints involved in the international shipping process.Here is a short list of things to consider when choosing a shipping company:
Do you understand the tax issues associated with becoming your own importer?
Does your preferred shipper have offices on both sides of the ocean?
Can they deliver door to door?
Can they give you a fixed or guaranteed price?
Can they make a customs declaration for you in China (in case your factory cannot)?
Can they handle both air and sea freight?
What is the weekly flight and shipping schedule?
How many days before you ship do you need to have product/documents in their warehouse/office?
Can they help you identify the customs code for your products for your home country?
Is there an export tax or visa in China required to ship your products?
Will they itemize pricing for you?
Do they have online or real-time tracking (for your convenience)?
How many stops will your product make before it gets to your door?
Do they ship it themselves or use 3rd party services?
If there are delays or problems, who is responsible and what will be done?
When you have confirmed with whom you will ship, book space as early as possible.Keep in mind that (3 months) before major US holidays and during high shipping seasons like back-to-school, you can expect shipping times and rates to double.Sometimes you can lock in a rate with a shipper for a certain period of time.See how long they can guarantee their prices-sometimes it's only two weeks; sometimes it's more.
You will be offered shipping insurance and we suggest you get it.Like all other kinds of insurance, it's something you buy hoping you will never have to use it.But you should buy it anyway; unless, of course, you can afford to lose everything.
Finally, customs departments can be a wealth of information.Spending half an hour with a customs agent can give you more information than you ever knew to ask for and ultimately save you time and money-and an importing audit.
Getting on the right path requires doing the right things.Being right is certainly the path to enlightenment.And in China it can be the path to success too! If you have any questions, just give us a call, send us an email or better yet, drop by for some tea and a chat.Good luck!
David Dayton the owner of Silk Road International and currently lives full-time in Shenzhen, China.He speaks English, Thai and Chinese and has worked in Asia for more than 15 years.You can contact him at firstname.lastname@example.org or at www.silkroadintl.net.
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