Supply Chain & Engineering Issues

The process of developing suppliers based in another country presents a number of challenges in the supply chain and engineering areas. Manufacturing in less developed countries involves a thorough understanding of the engineering and supply chain issues.

Prior to the partial privatization of businesses by the Chinese government, most enterprises were set up to support government controlled industries. For example, aerospace, automotive, and other manufacturing industries developed their own supply chains. Many of the companies in these supply chains now operate as private entities. Each company has distinctive competencies relative to the industries they previously served. They possess unique transferable capabilities, but don’t understand the intricacies of manufacturing for another industry or foreign customer. Many do not have the appropriate licensing that will allow the export of their goods and services abroad.

In addition, foreign companies wanting to do business in China must select suppliers based not only on competency, but proximity to China’s very uneven infrastructure development. Suppliers located in a major industrial region like Shanghai may boast the nation’s best technology and management, but labor and manufacturing costs there are more expensive. Less well known, less expensive, are smaller manufacturers, found in smaller Chinese cities in the interior. These companies may have the same competencies found in Shanghai because of expertise developed under the old system, but have no way to bring their services to market because of language and other customer service issues.

Other problems can haunt efforts to outsource in China. For example, trade names maybe different for certain metal alloys, polymers or adhesives common in the West. Sometimes these materials are not readily available in China, and must be imported on a timely basis. However, transport time and costs into, out of, and within China can impede profitable manufacturing. Moreover, many Chinese companies improperly process their Western clients’ orders due to different industry standards, technical know-how as applied in China compared to the West (i.e. material classifications, measurement) or poor communications. Many engineering standards applied in the West when translated by Chinese firms acquire an unacceptable “accent”. Some manufacturers have become ISO 9000 certified, but can’t manufacture the product to Western quality standards because they do not have either the appropriate equipment or controls. We at GAC understand these problems and are able to apply our expertise on your behalf to help make the relationship more cost competitive, while maintaining acceptable production standards.

GAC after determining its Western client’s needs is committed to finding the best alternatives possible in China for manufacturing and partnerships. We establish these partnerships based on a suitable infrastructure location relative to the manufacturing needs, Chinese supplier competencies to manufacture an individual product, and available materials. Moreover we utilize our other Asian, North American, and European network to cost effectively support your international partnership.