When done correctly, it is an irrefutable fact that manufacturing your product in Asia is more profitable than having it manufactured anywhere else in the world. However, because of language, and cultural barriers and the great distance between the client and Asia, the number one problem companies experience with Asian subcontractors is inadequate governance which accounts for the vast majority of problems encountered between the customer and supplier. We have to manage our subcontractors as we would our own factories.
5/19/2011
Outsource Management Pain Level Mitigation
How do you mitigate the pain level managing your subcontract manufacturing? I know what I do and I’d like to hear what you do.
Where’s my lot? What happened to the yield? What do you mean you built my parts without using the specs? Why isn’t the supplier responding to my emails? Why are we paying such high cost and what are our options?
Short story is, we have options-------While these problems can appear to be rather benign on the surface to the most casual observer, there can be catastrophic consequences if left unchecked. One of the most overlooked assets to any company’s outsourcing success is in their ability to react to and resolve issues quickly with their suppliers. Supplier relationships with suppliers play a big part in getting Quality product to market On Time with Competitive Prices.
In addition, companies who internalize the importance of developing and maintaining solid relationships with their suppliers have a much better success rate getting support when needed.
So what’s the best way of improving and maintaining solid supplier relationships? If you’ve ever tried to have a long distance relationship you can understand how distance can have ill effects maintaining solid relationships. It can be done, but by far it’s a minority success rate. Companies who can afford to stage folks near their suppliers typically have a greater success rate in their relationships than those who don’t or cannot afford the luxury. If you are in the latter category of companies, OMS (Outsource Management Services) companies can help. A word of caution outsourcing your subcontractor management; make sure you select folks who have done it before, preferably on the ground near your suppliers and continue to do it today mitigating the pain level.
SOMC is an OMS (Outsource Management Services) company providing operations management for outsourced manufacturing in Asia. Our firm specializes in performance capability improvements, source selection, manufacturing project management, total subcontractor management, and maximizing manufacturing efficiencies improving customer costs. We are intentionally located in the heart of S.E. Asia principally to maximize benefit to our client by being where the action is. In addition, locating ourselves in the same time zone also gives us the unique ability to quickly recognize and begin resolving issues more quickly by not having the common barriers that exist being 8,000 miles away from your manufacturing.
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