Comments on: Labor, Sub-suppliers and Time–3 other ways to lose money in China http://silkroadintl.net/blog/2010/03/15/labor-sub-suppliers-and-time-3-other-ways-to-lose-money-in-china/ Your Branch Office in Asia Thu, 15 Dec 2011 16:52:16 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: David Dayton http://silkroadintl.net/blog/2010/03/15/labor-sub-suppliers-and-time-3-other-ways-to-lose-money-in-china/comment-page-1/#comment-1746 David Dayton Tue, 16 Mar 2010 03:54:14 +0000 http://silkroadintl.net/blog/?p=793#comment-1746 I'll be honest, the back-up factory comment was tongue in cheek. I've never ever had a client that came to us that already had a back-up. (If they had back-up's they wouldn't be coming to us!) We have back-up's for (almost) everything we do simply because we've been burned so many times that we learned our lesson. We don't "manage" back-up suppliers as much as we qualify them and keep in touch with them (and use the them for other projects). You're right, small buyers have no ability to work with one supplier and still keep another interested without an order. Since we have numerous concurrent projects we have a much easier time keeping in contact with options and shifting quickly to someone new if things either go wrong or get delayed. The hardest part of this though, is not finding a back up, it's actually getting the original factory to agree to 1/2 qtty. Right now, when everything is 30 days late due to non-returning labor, they are a bit more understanding. But at other times, when the source of the delay or problem is less defined, they are not so accommodating. I’ll be honest, the back-up factory comment was tongue in cheek. I’ve never ever had a client that came to us that already had a back-up. (If they had back-up’s they wouldn’t be coming to us!) We have back-up’s for (almost) everything we do simply because we’ve been burned so many times that we learned our lesson.

We don’t “manage” back-up suppliers as much as we qualify them and keep in touch with them (and use the them for other projects). You’re right, small buyers have no ability to work with one supplier and still keep another interested without an order. Since we have numerous concurrent projects we have a much easier time keeping in contact with options and shifting quickly to someone new if things either go wrong or get delayed.

The hardest part of this though, is not finding a back up, it’s actually getting the original factory to agree to 1/2 qtty. Right now, when everything is 30 days late due to non-returning labor, they are a bit more understanding. But at other times, when the source of the delay or problem is less defined, they are not so accommodating.

]]> By: Jesse Covner http://silkroadintl.net/blog/2010/03/15/labor-sub-suppliers-and-time-3-other-ways-to-lose-money-in-china/comment-page-1/#comment-1744 Jesse Covner Mon, 15 Mar 2010 03:11:57 +0000 http://silkroadintl.net/blog/?p=793#comment-1744 Great post David. I'm curious..."Options 3. Cut orders in half and give the other half to your back up factory (you do have a back up option, right?). " What percentage of your sourcing customers actually have a back-up / secondary manufacturer? I'm working on a long-term Change Management project (ERP and Organizational change) with a multinational company. They make a lot of "custom" products which require custom parts from suppliers. But on a project basis, each part is essentially single-sourced to a supplier, and they don't systematically rotate those supplier between projects. Stated reasoning is because the parts are custom made, and hence cannot multi-source. BUT... we are not talking about custom tooling here.... many of the purchased-parts are basic sheet-metal parts (including custom cabinets made of sheet-metal). I imagine a small company would have a more difficult time to manage a backup supplier. Great post David.

I’m curious…”Options 3. Cut orders in half and give the other half to your back up factory (you do have a back up option, right?). ”

What percentage of your sourcing customers actually have a back-up / secondary manufacturer? I’m working on a long-term Change Management project (ERP and Organizational change) with a multinational company. They make a lot of “custom” products which require custom parts from suppliers. But on a project basis, each part is essentially single-sourced to a supplier, and they don’t systematically rotate those supplier between projects. Stated reasoning is because the parts are custom made, and hence cannot multi-source. BUT… we are not talking about custom tooling here…. many of the purchased-parts are basic sheet-metal parts (including custom cabinets made of sheet-metal). I imagine a small company would have a more difficult time to manage a backup supplier.

]]>