When there are linguistic and cultural barriers, communicating your needs, reaching an agreement, and maintaining transparency throughout the process becomes significantly more difficult.
FREMONT, CA: The benefits of contract manufacturing, sometimes known as outsourcing, are numerous and significant. When a corporation doesn't have to build and maintain its buildings or train and hire its employees, it saves money. It can relocate production to a country where raw materials and labor are less expensive and where competition for contracts within that country helps to decrease costs further. However, contract manufacturing has its own set of issues that, if not handled appropriately, might completely negate the objective. As a result, before committing to an outsourcing strategy, you should first assess the risks and devise measures to mitigate them.
Here are four ways to address challenges in contract manufacturing:
Everyone wants to reduce manufacturing costs, but not at the expense of quality. To create a finished product you're happy with to the market, you'll need high-quality materials, well-trained and capable workers, and efficient production methods. It is critical to select a facility that has appropriate controls in place at all phases of production. When launching a new product, quality control is vital.
The COVID-19 outbreak has caused supply chains to be affected and company activities impacted. Annual work slowdowns and stoppages for cultural events can and should be planned. It's also crucial to be aware of any potential political or labor turmoil in the country you've chosen. Furthermore, you should consider whether raw materials will be available, whether the government has the infrastructure to transport materials from point A to point B, and whether a facility will be able to fulfill your order. It is critical to have a backup plan in place in the case of a disruption.
Even under the best of circumstances, communication over long distances is difficult. When there are linguistic and cultural barriers, communicating your needs, reaching an agreement, and maintaining transparency throughout the process becomes significantly more difficult. Departures from your expectations, delays, and poor quality can all be the result of poor communication. Anyone doing business with a foreign manufacturer must have a strategy to overcome language and cultural barriers.
Distance from the production process
When you are miles away from the point of production, you don't have real-time access to what's going on. You could only have a rudimentary idea of how things are made. It's critical that you have faith in the managers in charge of production.