It seems to me that one of the hardest lessons that we are constantly teaching factories in China is the sometimes there just isn’t another chance.
Chinese factories certainly know that they usually only have once chance to get a client with a bid or a sample (hence underbidding and Golden Samples). And factories know that if there’s bad quality product they won’t get any reorders. They know all this.
But I’m talking about something a bit different. Once production has started and mistakes are found, it’s usually the position of the factory, after much negotiations, to offer to redo, fix, replace or repair the product. Of course who pays for this and how long it takes (and who pays for the resulting airfreight costs) are also always up for negotiations. And here’s where the lesson comes in.
Sometimes a redo, a fix, a replacement or a repair just doesn’t cut it. Sometimes it’s just too late. Sometimes the window of opportunity has passed. Sometimes a missed date is the death of the project.
I’ve seen this happen a number of times, and it’s not all the factory’s fault. Usually (most of the time) it’s initially the fault of the buyer. They are on a very strict time line. They miss a couple of small design/art dates in the beginning but continue to push the supplier to meet the delivery dates originally agreed too. The supplier agrees, of course, as they want to cooperate and hope to build some type of relationship that will turn into future orders. They also assume that since they accommodated the client, the client will do the same later.
Now factories always have issues. Some are small and can be fix with little or no impact on the delivery date. But some are much larger and change dates dramatically. But when push comes to shove, the factory thinks that it can bank on the store of good will they have built up with the client.
Only they can’t.
What factories don’t understand is the West’s infatuation with contractual dates. You know that if you’re planning on getting your product into a any of the box stores you’ve probably got a 72 hour delivery window that if you miss you’re completely out of luck. Your factory doesn’t know this. And the factory’s rework is almost never that fast. Further, if you’re shipping by sea you may have already scheduled your goods to go to port on the closing date—meaning if you miss that date you’ve got to wait at least a week to get on another ship.
Because EVERYTHING is negotiable in China, this almost never happens. Dates are missed and everyone understands, or at least compensates for the change/delay. I believe that factories honestly don’t get how important (devastating) a missed date can be.
Because it’s such a huge deal to get a factory to take responsibility for problems (just like it’s so tough to get individuals to loose face and admit mistakes) it’s like they assume that just the fact that they’ve admitted to it and will fix it should be the end all of all negotiations. But sometime sorry isn’t good enough.
What the buyer doesn’t understand is the quid pro quo that is part of the Chinese business culture. All those little favors are counted and recorded. There is a very tacit expectation that each one will be paid back. The supplier knows that they’ll have issues in the future and while no one likes delays, I know that factories love to have a client in their social debt—it makes the inevitable problems so much easier to work through. This is, of course, if the client understands the implicit cultural expectations.
Often the buyer gets bugged, rails on the factory for agreeing to dates (repeatedly and even after delays) and then falling through. The factory feels like they’ve been hit upside the head with a frying pan. They went out of their way to help and this is how they are repaid!? Now the project is late, the relationship is flushed down the toilet and it’s a fight just to wind things up.
Once it gets to this point the factory has no incentive to help the buyer. There is no trust at all that the buyer will keep their word. The buyer just wants to get their money back, which is not only unrealistic but probably impossible. The opportunity has passed and late product does no one any good.
Bottom line? If you expect your factory to go out of their way to cover for your “little mistakes” then you’d better be willing to do the same thing for them later. And later is ALWAYS more expensive. Plan you time, your negotiations, your requests and your projects very carefully and with as much knowledge/foresight into future costs and delays as you possibly can. Do NOT take anything for granted and never ask for favors, even small ones, that you’re not willing to return.
Tags: Business, China, Culture, Uncategorized by David Dayton
1 Comment »
