Product Global

Merry Christmas and Best Wishes for 2008

By now, you likely have many products that have gone through design, engineering, prototyping, manufacturing, packaging, shipping, distribution, marketing, and retail, resting under your tree or being exchanged over the holidays. 

For those involved in any part of the product commercialization process, it's  interesting to consider all of the people, places, and things that came together to culminate in that wrapped box with a bow.  Ok, when I look at my HP calculator sitting on the table next to me, it's not as if I'm getting teary-eyed and sentimental over it.  But, in today's world, I can only imagine all the pieces and parts that came from different countries to make a simple consumer electronic product like this.

I imagine, if you're reading this blog, you are involved in one, a few, or all of the phases of product commercialization which I mentioned above.  I  sincerely appreciate your readership and interest.  I hope to post more entries and write more insightful and entertaining content in 2008.  Global Sourcing Specialists has quite a bit going on these days, so I will certainly have the stories, thoughts, and rants to get out to you.  Happy Holidays to all of my readers and here is to a new year in which your product finds its way into a box with a bow exchanged by millions of people at this time next year. 

US Companies Manufacturing in China: Staying Cool and Staying Put

A survey completed by SmartCube, a firm that specializes in business research, indicates that despite the press and outlash regarding the recent China-quality debacles, the vast majority of U.S. companies aren't considering changing their supply chains, and certainly aren't considering picking up from China and moving elsewhere.

After the bad news about Mattel, toothpaste, and pet food, many China detractors speculated that companies in the U.S. would begin rethinking their quality control and supply chains, and perhaps even consider other countries to avoid the issues that they believed to be unique to China.  The SmartCube blog reports that:

In fact, the majority of manufacturers surveyed are confident their supply chains are more than adequately secure to ensure the safety of their products. Indeed, nearly 80% of respondents (all of whom were manufacturers who currently manufactured their products in China) reported that they felt no need to review their supply chain activities in the wake of the well-publicized toy and toothpaste recalls. Further, these global manufacturers believe that the recent recall issues, while serious, are aberrations and not symptomatic of some more fundamental issue inherent within Chinese manufacturing. They appear to be on solid ground, as Mattel itself has apologized for initially putting the blame on its Chinese suppliers.

Some interesting takeaways from the survey include:

• "Among the 22% of respondents that did say they would review their supply chain activities, more than one-third said they would make changes to the supplier evaluation process during selection or they would assign a person to look over quality adherence at the supplier location."
• "About 30% would send quality inspectors overseas to the production plants."
• This is noteworthy because these are not quick-fix solutions; these respondents are considering deploying significant resources to achieve greater product quality.
• We were not surprised to see that none of the survey respondents indicated that they would stop outsourcing manufacturing altogether.

Whether companies have indicated that they will be making supply chain changes or not, I think most companies and individuals working with Chinese manufacturers will have quality closer to the forefront of their minds.  This might result in anything from small corrective actions and a greater meticulousness, to qualifying suppliers more thoroughly or "making a list and checking it twice" (sorry..listening to Christmas music). 

In terms of companies relocating their supply chains, that's nonsense.  It's not easy to pick up and move factories, let alone countries.  It eats up time, money, and in the end, China is not unique with respect to the quality issues that arise in manufacturing.  Those who are sure we can escape the quality issues of manufacturing in China by simply moving to another country may be using this map to base their opinions.

It would be nice to review the findings of the study in more detail, but like Dan Harris of ChinaLawBlog, who posted on the study, I can't seem to find them.  Assuming SmartCube does their job well, it will be business as usual in factories in China. 

    

Outsource Manufacturing; Outsource Menial Tasks; Outsource...Thyself

In the past, I opened my presentations on offshore manufacturing and sourcing with a slide "The Global Economy is coming..."  Senseless.  I corrected myself by stating the obvious: the Global Economy is here, but the endless possibilities it presents us are only just becoming apparent.  We are limited only by our creativity and willingness to try new ideas.

Outsourcing is nothing new.  But now, more and more people, not just companies, are trying outsourcing on for size by sending a variety of tasks off to outsourcing firms and contractors across the globe.  I first came across this concept at the individual level in Tim Ferriss' book, 4-Hour Work Week.  An intriguing book that offers a slew of thought-provoking tips on how to save time and energy from the author's experience in outsourcing much of his life. 

And it's not just data entry, graphic design, web design, phone receptionist tasks, product development and manufacturing sourcing/management (ahem...) and aspects that businesses either like to or ought to delegate to someone better suited for the job.  The idea can be extended to booking travel plans, haircut appointments, buying movie tickets, sending flowers to your wife, and even...dating?

I've tried this with a few business and personal tasks myself.  I found a few small firms on Elance in India as well as the U.S.  Firms and contractors range from $30/hour to $3/hour.  More often than not, you get what you pay for.  But, as is often the case with manufacturing, the nature of the Global Economy is that some tasks  are better completed by a hard-working person in another country, for a reduced cost.  After qualifying the firms for capabilities like the ability to write English, follow instructions, and checking references, I chose a small firm in India and sent off some relatively simple tasks that I preferred to have someone else spend their time on--data entry and the like. 

After seeing their competence, I decided to see what they were capable of.  I had the firm research the internet for specific kinds of companies and take down their contact info and a company description in an excel spreadsheet.  Once I approved the list, I had them email out a message, drafted by me, to these companies.  Half of the companies responded and I realized I had just completed hours of marketing research, data entry, and a small email marketing campaign in a matter of 20 minutes (the time it took me to draft the instructions and message for the Indian firm), for approximately $20-$30.

Just like offshore manufacturing, spending the time upfront to find competent groups and people you can outsource tasks to is a must.  But, once this is developed, the investment drops near to zero.  Keep the tasks you're good at and outsource the rest.  Big companies, small companies, and now individuals, are learning how to do this and reaping the benefits.

For more on how to accomplish this effectively, I recommend starting here:

And this was just too good not to post:

Report: Many U.S. Parents Outsourcing Child Care Overseas