Developping product with chinese manufacturer or factory in China

Quite often I receive request from people who are interested in developping new products in China using a potential chinese supplier to enter into an activity of design, engineering and prototyping.
I have experienced it in the past and this is those experience who pushed our company to perform development in-house because we were wasting more time in baby sitting and teaching that in doing the development itself. Receive many request for developping product in China trying to leverage chinese manufacturing led me to writte this blog post.

Why developing product with a chinese factory is not always easy and fast?

1./ Design and Engineering are subcontracted

If you have visited enough factories in China like I did you will find out that many of them are not the one who design the product they manufacture. How come is it possible you may think ? Well in Asia it is very common that factory subcontract their engineering to some other companies. This is particularly true in the electronics industry. Doubting on it ? Just go to any tablet factory and ask them to see the PCB layout of the tablet and the source code of the firmware….. Most of time they are unable to show you those documents because they simply don’t have access to it and didn’t design it by themselves.
This is particularly true for electronic parts, but it is also true for mechanical parts: quite often the mechanical engineering is sub-contracted to some others companies. At the difference of electronic design, the mechan
On this base, if you try to develop a product with a Chinese factory you may be in the situation where the factory is your contact window but the people who are implementing and executing are in another company which you don’t control and don’t have access. In result you may become victim of “grape phone” or “chinese whispers” effect.
This effect bring some difficulties because the people you are talking with don’t have direct capabilities to change or modify a design. They will need to communicate with another company, who internally will have to find the right people, etc… It makes the process more complicated and not very straight forward. To avoid this issue, either you can use a product development company having experience in manufacturing who can do the design for you and then accompany you to manufacturing, so you can save time and accelerate your product development phase.
Be very carefull, sometimes a chinese manufacturer may tell you they have engineers in house but quite often those engineers doesn’t create the product from scratch by themselves, they are rather used for local manufacturing debugging local support. They may be just capable to read documentation to identify production issue but rarely they are able to design a product from scratch or to adapt it.
In short, I would summarize, that you can perfectly use a Chinese factory as being the hand but rarely being the brain of the product fabrication. For this, I recommend two possibiities:

2./ Lack of creativity

I have been working with hundred of suppliers in direct, and one things that qualify most of them often is a bit lack of creativity and originality when it comes to develop product (I don’t say all of them are in this situation, because it would be dishonest to say so but still too many are). There are some big companies who potentially have some capacity to be creative, but most of time people I work with are not enough big yet to be able to work with those big companies.
I found out this is particularly true in the electronic industry. if you go from factory to factory you may find out the products are roughly the same (with some small variations). It is true in the electronic but not only in this industry, just look at the car industry. I was reading this article a few days ago.
A simple demonstration of this when your contact at the factory tell you: “Can you send me a sample of the product so we can use it as a base”, how many times have you heard this sentence from a sales people ? Probably many times like I did. When they say this, you have impression they are lost and incapable to create product from scratch and they can only copy something already existing.

3./ Lack of target market understanding

It is not always easy for someone who didn’t travel abroad to understand the culture and the manner of a market. I remember a case where a customer was trying to develop a ping pong beer game with a supplier and where the factory was completely ununderstanding what was going on because they never heard about this game before.
Sometimes, it is difficult for them to imagine the constraints, the final use and understand the standard you need for your product simply because they may miss a bit some markt sense. We can not blame people for this because not everybody has the chance to travel abroad to see how other cultures are living.

4./ Communication jetlaged

As the product development phase is not the easiest part to manage when you are kickstarting a product, it is very important to be able to discuss with your supplier quickly and efficiently as it will ease the process and accelerate the development process.
Sometimes, when you are located on the other side of the planet and don’t necessarely have time to travel to China to perform your producr development, then communicating and explaining at distance can become complicated due to jet lag effect. You start working then they start to sleep, and they start to work when you start sleeping. For each day of communication it actually takes two and it increase the lead time for development by two

5./ Lack of capability

Sometimes, manufacturer are simply impatient and consider the developpment phase should be done prior contacting them for production. In a sense I understand it because it is definitively tru that a product development phase is totally different business that manufacturing. Making try the hands to become a brain is simply impossible.

However, quite often, in order to secure a manufacturing order, a chiense factory may propose you to make the product development by themselves almost for free. In this case they ask you to pay the deposit of the order in exchange they will start doing the product development phase. I don’t tell you how many times I have seen manufacturers trying to operate this way while not being able to develop the product because having underestimated the difficulty; which in the end lead to a situation where they give up the project telling you they can not do. You just have lost 2 or 3 months of development..

6./ Lack of patience

Manufacturing is a process quite straight forward because most of time the design and engineering have been done and the product is already stabilized. On the opposite,  product development is a process not straight forward at all as it constantly involve some complexity and difficulties related to design, engineering, manufacturing consideration, certification etc…

Manufacturer are usually used to quick money making by running production straight away. They are rarely patient enough to develop product because developping product takes a lot of time, involve iteration of product and sometimes going back to modify design. If on the top of this, the principal (you) are not clear enough at the beginning about what you want, then your manufacturer in charge of product devlopment may quickly loose patience and will finally give up your project, and here again you will have lost several precious month in time to market.

How to ease the process and accelerate your product development in China

1./ Employ a project management team on the ground

You can either have your own project management team from your own country to come in China to babysit your factory, but in this case, make sure they have enough experience both in design, engineering and manufacturing to assist efficiently your supplier on the ground, otherwise you might be in the case that the local management by your team may be unefficient and cost actually more to you in travel expenses than employing someone locally.
If you are still at the early stage of your development, then a product development company in China being onsite and having experience to deal with new product development and manufacturing may be an asset to support your design and engineering phase. Depending on how you value your time, it will cost you more or less than dealing it by yourself and will supply local support and presence.

2./ Select carefully the chinese factory

If you absolutely stick with the idea to appoint a Chinese factory to develop your product, then make sure they are capable to do so before engaging any deposit with them. Perform a factory audit or vendor assessment to verify their profile and make sure they have some technical resources and engineering capabilities in-house. If they don’t have those engineering capabilities, then just run away somewhere else.

3./ Avoid trading companies by all mean

This is something I always preach, but the same way than working with a manufacurer who subcontract the design, if you work with a trading company it will add up one more people in the chain, increase the “chinese whisper” effect to your supply and development chain, which finally increase the risk to fail your project.

4./ Have a clear roadmap of the project

Whatever the project you start, you should have a clear roadmap of what has to be done. This roadmap should include timeline with deadline, milestone and clear description of what should be done, by who and when.
In a conclusion:
a./ You absolutely want to work with your chinese manufacturer to develop your product ? I recommend you take a baby sitter such as buying office, a buying agent or a project management office in China to support your product development.
b./ You are willing to control fully the design and product development phase. In this case I would recommend to work with a product development company who will handle all the product development phase.
What is your experience with developping product with chinese manufacturer ?
About Christopher Oliva 77 Articles
Christopher Oliva is an Engineer based in Shenzhen since 2008 involved in Product Development, Supply Chain, Sourcing, Quality Management and Manufacturing activities. With a Msc Electrical Engineering and a Business Administration background, an ISO 9001 Lead Auditor Certification, a Six Sigma Certification and a Quality Engineering Certification, he works as a consultant on mission and contract oriented to Product Development, Manufacturing Management, Quality Assurance & Quality Management System setup. He works in the product development and engineering field, and as well as an advisor and quality consultant for several quality control and quality assurance companies.

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