Tips for managing a supply chain in China Secrets of the Gantt chart

Tips for managing a China supply chain: Secrets of the Gantt chart

The secret to managing your China supply chain

As the China-based partner responsible for managing suppliers and supply chains on behalf of our clients, PassageMaker places great emphasis on fostering efficient communication and cooperation among our team, our clients and the suppliers.

Weather your outsource your China project to PassageMaker, or manage things on your own, here are some tips, tools and strategies learned the hard way during my past 20 years in Asia.

Tips for using Gantt charts when managing Chinese staff and factories

What’s a Gantt chart?

A Gantt chart is a type of bar chart, that helps managers and staff visualize the project gates and progress to date. It’s a slick way of keeping track of who is doing what when and why. Gantt charts were considered revolutionary when first introduced in Europe and American before World War I.

While they have been a common tool in the west for over a decade, in China you would be shocked at how many large famous suppliers don’t have a clue about how to use a Gantt chart.  So as buyers, sometimes we need to train our suppliers. Here are some tips. 

How PassageMaker uses Gantt charts to coordinate the supply chain in China

Tips for managing a China supply chain Secrets of the Gantt chart

I love Gantt charts and my Chinese suppliers are always happy to see a well laid out plan for getting the order out the door. The problem is not getting suppliers to commit to a time line and process flow, that’s easy, especially if a large PO hangs in the balance. The problem is getting suppliers to respect the Gantt and meet more than just the first few project gateways.

I don’t think this lack of respect is generation or cultural, I think it is more economical and dependent on the realities of the buyer-seller agreement. Let me illustrate my point by explaining two common headaches I run into in China.

1. The costs of raw materials go up and down, so the supplier tries to play the market and buy his raw materials at a lower cost. If the raw materials keep going up, the supplier may decide to break the contract rather than cut his margin or produce at a loss. As a Westerner used to dealing with Gantt charts and contracts back home that “mean something”, I was totally blown away by this casual attitude in China when I first came here 12 years ago.

These days when I place the PO or give a deposit to start the order, I make it real clear to the supplier that I expect him to purchase the raw materials ASAP and I have my team (or 3rd representatives) on site to verify materials have been purchased. In other words “I verify and enforce the Gantt myself at every key gateway” before it gets a chance to run too far off course.

2. You would think the above step would solve things, but….think again. Even after verifying the materials for my order were in the factory, now and again, I would get a call at the 11th hour stating the supplier couldn’t ship and usually some reason was made up like “power outage”, “lack of workers” and the most common fake reason- “equipment or tooling problems”. 9 out of 10 times, when I looked into it, I learned that another more important buyer (in the eyes of the factory) twisted the arm of the supplier to use my stock for their order.

If you are buying 10,000 neck ties and Wal-Mart walks in to your supplier with an order for 1 million, you may find the supplier ready and willing to break the terms of your agreement to make more money from somewhere else. That is why I try to find factories that are an appropriate size where my order will get the respect it deserves. Another tool I use is to build a “goodwill piggy bank”.

I try to maintain good relations through holiday greetings, frequent visits/ meals and even vacation invitations so that the suppliers get to know me as a good friend rather than just PO #. This goodwill has saved me a few times when my suppliers opted to honor the friendship when the contract alone would not have been persuasive enough.

Closing remarks about using Gantt charts and managing China-based entities

In short, a Gantt chart is an essential tool of project management. But it takes a project manager to enforce the tool and if the project managers don’t have goodwill or legitimate “carrot and stick” power over the supplier, even the best project manager and most detailed Gantt chart will not always lead to meeting targets for lead time(s), price and quality. Perhaps the most frustrating things about China sourcing is that the buyer (not the supplier) generally ends up doing the project management. This kills a lot of small projects when the buyer doesn’t have the resources or budget to manage the supplier. 

Visit PassageMaker to learn how you can outsource the project management to our team in China and let us build the Gantt charts (that’s the easy stuff) and motivate the suppliers (that’s the hard part!).

Learn how to manage manufacturing in China by fostering clear communications with your suppliers here!

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