Are you considering alternatives to your existing sourcing process? Have you considered manufacturing in China to optimize your supply chain? But not sure if it’s worth it…or how to begin? Do you find looking for manufacturers to make your designed parts overly time-consuming? Do you expect to have sourced goods to meet or exceed your cost and quality standards?
China remains one of the best places to source manufactured goods because of lower prices and infrastructure unmatched in other foreign countries. It has one of the world’s most advanced manufacturing capabilities. The challenge is understating the additional steps required to optimize this desirable source. Consider tapping into an experienced China sourcing expert such as Freyr Facilitators, who have over 30 years of experience conducting business in this fascinating, yet complicated country.
If you have a designed component (part, assembly) with complete specs, the typical process would be sending an inquiry to a handful of manufacturers you are familiar with. The process is more complicated when seeking a source in China as several factors come into play.
- Finding a factory that can the item to your exact requirements
If your organization has little to no experience in finding suitable suppliers in China, you will need help from someone who does. The options are to buy from a US-based trading firm or distributor or hire an experienced consultant. - Being flexible with an existing design specification, as some are just not available in China
Certain materials or specifications may not be available if the product was designed to be sourced in the US. China may not be a good option if your production lot is below the MOQ required for raw material. You can have advanced consideration by speaking with a reseller or consultant. - Factor in packaging for ocean freight that can mesh with inventory needs and reduce shipping costs
The most economical way to deliver goods from China is to ship in full containers. Be ready to work with operations to optimize package sizes and quantities, as bulk shipping is the only decent option. - Be aware of import duties and tariffs
Goods from China can be more confusing because of ad valorem duties applied to many goods. The list of product codes are available at Harmonized Tariff Schedule (usitc.gov), but finding the most suitable can be difficult. A 3rd party logistics firm or import consultant can assist in finding the appropriate HTS code for your product.
These are common issues for mid-size OEMs who wish to take advantage of China-sourced goods but lack an in-country presence or department with expertise in foreign sourcing and importing. To understand and determine if manufactured goods can be made at lower cost with equivalent to better quality, you can seek the help of an import company that would buy and resell your goods back to you or hire a China sourcing consultant to walk you through all the steps and keep the procurement process in your control.
For a free audit of a component’s suitability to be made in China, contact Freyer Facilitators: answers@freyrfacilitators.com
