How to manage a team to coordinate your supply chain in China

How to manage a team to coordinate your China supply chain!

Boots on the ground

My sales team wanted me to answer the question with the recommendation “just outsource it to PassageMaker”. While our company would certainly be happy to provide this service, I hate blogs that are advertisements, so for this article I decided to offer a behind-the-scenes look at how to manage Chinese staff and a China supply chain.

Because many factories, even the large professional manufacturers in China, lack basic project management skills, the buyer ends up having to take point on building communications with the factory to ensure project goals for price, quality and lead time are achieved.

You may be surprised to learn that many factories simply don’t bother to update clients on project status, unless the clients ask. In China, no news is usually NOT good news. The last thing you want is to hear about a problem AFTER the ship date has been missed.

But there are tools and techniques to overcome the lack of project management at the factory side.  Here are some tips and skills to master:

Tip #1:

Consider having a member of your home office join the Project Management Institute. This site offers training materials and courses on professional project management. I have been a member for over 5 years and have encouraged my staff to get certified with PMI. It pays dividends for all involved.

Tip #2

While PMI is great for general project management, they don’t offer a course on China Project Management.  You can find this type of course at China Sourcing Academy and if you don’t want to learn the business on your own, you can always outsource supply chain management to an agent.  Regardless of which option you choose, here is more information on two essential skills that you and your team will need when managing projects in China:

Skill #1: Writing and enforcing specifications

As professional buyers we need to be picky with our China suppliers. But more importantly, we need to be professional in our ability to create a written standard for our expected quality. The best way to avoid defects is for the factory to have a crystal clear understanding in terms of what is your standard and how to inspect for that standard (including what tools and techniques are required).

This article explains how: ”How to clarify specifications and avoid surprises?

Skill #2:  How to meet or achieve target dates for critical project steps

How to manage a team to coordinate your China supply chain

After 20 years in China, here are the 4 most common reasons projects miss their target dates.

1. Incomplete Design Databases

This is the A-#1, super-duper granddaddy of all causes of delays. You really, really, REALLY need to have all the elements of the design finalized before going to production. Leaving even the smallest element of the design open to interpretation will lead to the supplier interpreting it in the way exactly opposite from what you wanted.

2. Payment delay

China is pretty close to a cash economy unless you are a buyer for a Fortune 500 company. All Purchase Orders (POs) will require a deposit, in most cases because the manufacturer is going to use that money to pay cash for the raw materials. Tooling is typically 30% At Time of Order (ATO), 40% at 1st article and 30% at final approval, before delivery. Production is most often 50% ATO and 50% At Time of Shipment (ATS), which means in practice, 100% is due before the product leaves the factory. All these terms are clearly communicated early in the project, but at least 80% of the time, there are delays from clients not paying in a timely fashion.

3. The uncommunicative buyer

It is not uncommon for projects to get caught in the doldrums and go nowhere for days, weeks, even months because the client is AWOL. It is very, very common to play “hurry up and wait”.

4. The buyer who’s in a hurry

While this might seem to be right attitude to keep things moving fast, the buyer who is in a hurry often places speed over accuracy. They want to cut corners, skip prototypes, skip writing a Product Quality Manual (PQM) or not bothering to proof-read the PQM, etc. Sometimes this works out, but not often. More commonly when you deviate from the normal project flow, you end up causing more delays.

Here’s more related content for you to read up on:

How to keep sourcing projects on schedule

Options for recruiting local staff in China and what tasks can be assigned to them.

How to select a professional agency for outsourced manpower

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