Top 5 Tips for Choosing a Product Sourcing Company
Top 5 Tips for Choosing a Product Sourcing Company
The abundance of outsourced manufacturers (particularly in Asia) has allowed retailers and brands to manufacture own brand products whilst also reducing barriers to entry for new start-ups. How these factories are managed is an important part of the success of these companies. There are numerous ways to engage with suppliers and these will need address in-house expertise, location, language, culture, manufacturing capability to name a few.
One option is partnering with a product sourcing company which has a presence on the ground in the local market, product knowledge and can add value when it comes to managing the supplier from development through to shipment. In this article, we will be providing you with top tips for choosing a product sourcing company you can depend on based on a few critical factors.
Tip #1: Make Sure They Know Your Industry
The sourcing company you choose should have a vast array of knowledge in various categories. If they do not understand your product line, the manufacturing process or quality standards then critical steps could be missed. One of the largest benefits of using a sourcing company is the ability to leverage resource (as opposed to relying on one in-house product developer as an example) and expertise.
Always ask and check their site for case studies and know-how about your product. At ET2C, for example, we have over 2,000 supplier contacts across a broad manufacturing sector.
Tip #2: Trust and Credibility
Always make sure the product sourcing company you choose can pass an in-depth background check. Research their previous clients, social media including LinkedIn as well as each employee carefully. As an overseas supplier, integrity and trust are essential and you should be able to get client references to further consolidate your due diligence process.
Check out the following thoroughly:
- Years in the industry
- Proven track record
- Quality Assurance Process
- Financial assessment
- Excellent reviews from a variety of clients
- Organisational structure and the ‘Team’
- Certifications and accreditations that the company has been awarded
Bonus Tip: Particularly in Asia, integrity is essential and make sure you understand the management structure and their key clients as part of your reference check. Look for examples of long client relationships.
Tip #3: Location
One of the most crucial aspects of choosing a product sourcing company is taking advantage of its reach across the manufacturing base. It is important that they have offices and staff that are well placed to service these suppliers and work closely with them. This is particularly relevant for quality control and assurance as if they are located far away from your suppliers this could lead to higher costs due to transport, time etc. It pays to therefore familiarize yourself with where your products are sourced and how close that is to your sourcing partners.
Tip #4: Ethical Considerations
Increasingly, the consumer is becoming more ethically aware and this means that your sourcing partner should have an understanding of what this means on a quality and manufacturing level. It is a complex topic and leveraging some expertise, whether it is around innovative materials or processes to the rights of factory workers, is invaluable.
Tip #5: Quality Control
Making sure your sourcing company successfully oversees every step of the quality process is critical. The main areas that require quality assurance are:
- Factory Evaluation – this refers to checking in on every aspect of the factory process, from manufacturing and technical audits. This will give you peace of mind as well as transparency with your overseas partners
- Product and Sampling – a third party should be overseeing your samples and product standards to save on cost, make sure there is no damage to the samples, as well as evaluating shipping and other technical criteria
- Process Inspection – having someone check in regularly during the production process is also critical. Every factory should have consistent updates to ensure quality and safety
- Final Quality Inspection – a final check on the production quality to make sure that any issues are identified upstream and can be addressed before shipment.
Summary
Having a successful partnership with a product sourcing company should not hard. Make sure any company you select has a good track record and years of experience. It is essential to your business that you get the products you need at the right price, quality and on time. Leveraging the experience and expertise of a product sourcing company is one good way of making this happen.
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Garden Products from Vietnam: an Industry in Bloom
Garden Products is a growth manufacturing sector in Vietnam, due to the available raw material and skill set within the workforce. Taking advantage of raw materials and with a strong OEM capability, there are suppliers capable of producing customised pieces whilst assuring high-quality standards at competitive prices.
Certainly, the many favorable conditions within the country make the Vietnamese offering one of the most competitive in Asia.
Why “Sourcing from Vietnam” became a trending topic?
Vietnam is one of the most dynamic and fastest-growing emerging markets. First, it is currently propelled by buoyant export demand and supported by strong foreign direct investment. In addition, Vietnam’s geographical proximity to China and strong political and economic links with Beijing pay dividends. Current cost pressures created by US trade tariffs has seen manufacturers shift production out of China to cheaper locations such as Vietnam. The country benefits from regional trade pacts and a young and educated population. Furthermore, the still cheap and growing labour force continues to attract direct foreign investment.
Vietnam suppliers also have the advantage of having most raw materials available domestically. Natural rattan can be sourced from provinces in northeastern, north-central and central Vietnam.
Five Advantages of Sourcing from Vietnam.
If not already, the latest and increased round of tariffs on China by the USA further augments the demand for companies to move to Vietnam as an alternative to China. Meanwhile, Vietnam has also moved to seize on these opportunities with Vietnamese exports to the US having increased by 36% in the first five months of 2019 when compared to the same period last year. Consequently, with goods valued at 25 billion US dollars shipped into the United States, Vietnam has become the eighth biggest source of American imports.
As a Vietnam sourcing company and a presence on the ground for the past twelve years, we have seen the development and evolution of the manufacturing sector in Vietnam. Now, more than ever, Vietnam should form part of any company’s Asian sourcing strategy.
1. Favourable Geographical Location
Vietnam is one of the top South-Asian countries with almost 3,500 kilometres of coastline. This presents great potential for shipping efficiencies and provides access to neighbouring countries with no access to the sea such as Laos and Cambodia. In fact, Vietnam has a total of 114 seaports, 14 of which are relatively large and named as one of the keys to economic development.
2. A Young and Skilled Workforce in Vietnam
Of Vietnam’s 95 million people, half are under 30. This is in stark contrast to the demographics of many other Asian countries (China in particoular). Vietnam therefore wields a young and dynamic workforce, which combined with low labour rates relative to other manufacturing export markets, makes it a suitable manufacturing destination.
3. Numerous positive trade agreements
Vietnam has signed a number of beneficial trade agreements that act as enablers to the manufacturing sector. Most recently EVFTA between Europe and Vietnam, albeit this is yet to ratified.
4. The best political stability option of the region
Political stability is always a key factor in determining the right country to manufacture in. Vietnam has a stable Government and is seen as one of the most politically stable markets across Asia.
5. A Growing Manufacturing Sector
As well as the more established product sectors in Vietnam (handicrafts, ceramics, furniture, shoes etc), there is increasing FDI within the manufacturing sector and infrastructure leading to the evolution of new product categories such as kitchenware, plastics and Garden products.
Garden Products: Key Sectors and Strengths
ET2C has identified opportunities within the Garden & Outdoor sector exclusively from Vietnam due to raw material availability as well as manufacturing capability already in situ.
For example, Garden furniture manufacturers take advantage of raw material availability in Quy Nhon and locate themselves in close proximity. In addition, because they are located outside the major cities allows them to leverage lower labour costs too.
Furthermore, Vietnam continues to attract business from US businesses due to current tariffs on China which will mean costs rising by anything up to 25%. Many Vietnamese suppliers are investing in additional R&D to ensure they have a competitive edge by presenting new designs according to market requirements.
The key sectors in this industry include:
- Pottery
- Netting
- Garden Tools
- Garden Gloves
- Plant support, Arches & Obelisks
- Cocoliners & Hanging Baskets
- Garden Furniture
We Are Garden; Come to Vietnam for Garden Products and Outdoor Opportunities
As your Asian sourcing expert, ET2C has identified the Garden Products and Outdoor sector as a growth manufacturing sector in Vietnam. Where necessary, we have developed manufacturing capability at factory level to produce high-quality products at competitive prices. There is now a unique opportunity to source a breadth of products all out of Vietnam.
For more information, please contact us at vietnam@et2cint.com. We will help your business positively bloom!
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How a Third Party Quality Control Service Can Benefit Your Business
How a Third Party Quality Control Service Can Benefit Your Business
A third-party quality control service operates as a keystone of your supply chain. Whether you source from down the road or as far as Asia, quality control requires constant attention. When your product must meet certain requirements to sell, verifying the capabilities of your suppliers is critical.
Thankfully, quality control metrics ensure that your decision to source from Asia remains cost-effective. Through early identification of issues and swift implementation of corrective action plans, quality control services deliver sustainable value to their clients.
Why Should You Consider a Third Party Quality Control Service?
When it comes to quality control and assurance, your business should embrace the best services for your product’s needs. Quality control checks give updates for whatever steps in production you choose to inspect. Sometimes that means inspecting materials before they ship from the factory, and other times before production begins, or any number of inspections between the two.
A range of representatives operate inspections in Asia, from in-house to third party.
With an In-House Inspector at the Factory
In-house inspectors work from within the factory, developing quality control reports at requested moments in production. If you have established the trustworthiness of a factory, then this option is certainly viable. With a continuous improvement methodology and training at the factory level, it is possible to move to a self-certification inspection process that puts the responsibility for quality inspections firmly on the Supplier.
However, there is a potential conflict of interest. Loyalty may warrant that their interests align with the manufacturer over their clients and a costly mistake on the factory floor may be pawned off as certified for importers to discover in their own warehouses.
With a third Party Quality Control Service
Third-party quality control services function as the industry standard for quality control. They are objective and have experience across different product categories, which provides additional added value when it comes to potential product-specific quality issues.
Control parameters play an invaluable role in the performance of quality products. There is little doubt as to the value of a third party quality control service in Asia.
What Quality Controls Do I Need for My Business?
Early audits of factory and supplier capabilities ensure that your partners are capable of fulfilling orders. At this point in the process, you should be examining the methods and metrics of quality control. Manufacturers must demonstrate the infrastructure and technology necessary to identify and correct any errors in production.
Visibility is paramount. Understanding the production process and the materials being used to make your product are key to a successful production. It is important to recognize potential communication issues stemming from your instructions. Every part of your product specification creates a measurable benchmark for a third party quality control service to validate. Once you define a key metric, quality control checks evaluate whether production is meeting those expectations.
Some metrics are already set, like the Acceptable Quality Limits (AQL) outlined in the ISO 2859-1. While your own expectation can aim higher, meeting these baseline expectations can critically impact the salability of your product.
Critically identifying potential issues upstream, on-site, at the factory will remove significant future cost. Once the products have been shipped costs have already been incurred and it is likely that the cost of goods has already been transferred to the supplier. Getting anything back at that stage is problematic at best. Therefore, investing in third party quality control services has a significant benefit to your business and provides a level of comfort that your company’s money is being well spent.
Transparency and Accountability
Finding a trustworthy third party quality control service will provide a significant benefit to your business. We at ET2C International understand the necessity for transparency and accountability because they are core to what we do each day.
Contact us to learn more about the role of a third party quality control service plays in your supply chain and the range of services that we can provide.
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Sustainability: The Catwalk and Beyond
Consumers have increasingly taken an interest in sustainability, and this has led to a range of innovative materials being used by fashion brands. This year, eco-friendly, ethical and sustainable fashion has risen to prominence on the industry’s agenda.
And it is about time. ‘Fast Fashion,’ riding the wave of consumerism, has long been chastised for the amount of waste produced by the industry. The statistics are staggering and highlight the issue at hand.
- Second to oil, the clothing and textile industry is the largest polluter in the world
- The fashion industry contributes 10% of global greenhouse gas emissions due to its long supply chains and energy intensive production
- Nearly 20% of global waste water is produced by the fashion industry
- 20,000 liters is the amount of water needed to produce one kilogram of cotton; equivalent to a single t-shirt and pair of jeans
- It takes more than 5,000 gallons of water to manufacture just a T-shirt and a pair of jeans
It’s not just the waste; practices within the industry also draw ire from various stakeholders. Last year, it was reported that Burberry burnt some $38 million worth of stock to prevent it being sold ‘on the cheap’ and to protect the brand.
The result is that innovation has come to the fore. Positive for both the conscious consumer as well as the wider environment. The bright lights have exposed how much water is required to make cotton yarns and the problems associated with the use of microfibres.
Inspiring Innovation
Now the industry is playing with new materials such as‘leather’ made from grape skins or discarded leaves from pineapple production. A manufacturing evolution is underway and more of the mainstream brands are looking at alternative materials to appeal to their consumer base in new and creative ways.
Similarly, the impact that ocean plastic has had on our oceans and marine life has received considerable press coverage over the past 18 months, leading to some brands committing to the use of recovered ocean plastic—Adidas has committed to only using ocean plastic in their uppers by 2024. But the fashion industry is not alone. The average plastic water bottle requires more than twice the amount of water in the bottle to produce the plastic.
There are evidently “hidden environmental costs” across a range of products that the consumer has not been aware of, until now.
More than Material
Clearly, sustainability is not just about the materials, but also about how the products are used, their impact on the environment and people, and how they are discarded. ‘Circularity’ is a concept that a lot of brands and retailers are assessing how to fit within their own business models. IKEA is one such brand that is already undergoing trials to refurbish second-hand furniture for resale.
It is complex and encapsulates a whole range of issues that need to be addressed. How can companies measure the impact of sustainability? Do they have support at government and regulatory level? Which aspects of sustainability are tangible and can be affected by the business and their partners across their supply chains?
There is no point in having a ‘moon shot’ to change the world when a company is paralysed by debt levels on its balance sheet as an example.
Shifting Mindset
Ultimately, companies need to really believe in sustainability at their core for it to be believed by their consumer (look at companies like Patagonia). This is more difficult than it sounds and engagement across all stakeholders is paramount for this to become a reality.
The good news, despite additional investment required to move needle of sustainability, is that it does pay. Philip Kotler suggests that over time, there is clear evidence that a sustainable agenda will generate additional profits that are tangible and add to a company’s bottom line.
The Manufacturers
Manufacturing must pivot and incorporate new production methods and materials to enable companies to deliver on their consumers’ expectations, which are not always abundantly clear.
There are factories that are investing in their manufacturing plants to enhance their sustainable practices. For example, one factory in Vietnam has such a sophisticated dye treatment facility that it is used to clean the drinking water for the local villages.
New and innovative materials are already being produced and developed in China such as Repreve’s recycled plastic fibres. Packaging factories are also looking at how they use materials, with changes to the plastic being used to more environmentally friendly versions (PVC versus TPU as an example).
Consumerism has grown a conscious and the manufacturing landscape has changed forever. The speed of this evolution will increase and those manufacturers that do not keep up with the pace will lose market share and likely their business in the medium term.
Summary
While the path to sustainability is not evenly paved, there are clear rewards to be obtained. It is well recognized that the current course of production and consumption is not sustainable within the planet’s natural resource limits.
At ET2C International, we value sustainability and are committed to helping clients with sustainability solutions. We are already collaborating with our clients in the arena. For example, we are producing sneakers that incorporate a sustainable element across the entire shoe (and four post-consumer water bottles in each pair) and are also implementing our own ethical code of conduct across all our suppliers to ensure sustainable practices are in place.
For more information or insight on creating more sustainable sourcing, contact us here.
How Important Is Quality Control Service for Your Business?
A quality control service enables cost-efficient, Asian sourcing with transparency and accountability. If you source from any location that you do not directly oversee, quality control checks and a quality assurance capability are an absolute must.
When your supply chain operates a few thousand miles away, popping into the factory for necessary inspections is rarely a realistic option. But, distance should not lead to a drop in product quality.
Overseas Should Not Mean Oversights
Sourcing from overseas countries introduces a range of new risk factors to an already complex manufacturing process and supply chain. Proper sourcing solutions and active management alleviate these factors to maximize cost-effective quality.
Quality control services act as a filter between each step of your manufacturing process. One common misconception businesses encounter when they seek quality assurance is the idea that such services eliminate all risk.
A quality control service cannot guarantee that nothing will go wrong. Rather, their job is to identify issues early to help determine the best quality solutions. Quality control specialists conduct most final inspections under internationally recognized sampling methodology (AQL). Rather than checking every single piece, inspectors sample shipments for errors.
Why Do You Need Quality Control Services?
At this point, you may find one question running through your mind: If they cannot prevent all possible mistakes, then why bother hiring a quality control service?
Issues will occur and problems will manifest themselves. Quality control services provide the capability to manage these upstream. Once a Quality control specialists identifies an issue, quick implementation of correction action plans ensures that quality products still ship in good time.
When is the worst time to discover a quality problem? Whilst standing in your warehouse staring at the open container. Quality control plays an integral role in preventing such a scenario.
Identifying problems early in the manufacturing process empowers businesses to modify or, if necessary, reject the product upstream (on factory site) to eliminate the additional costs of shipping unsalable goods.
When Should You Perform Quality Control Checks?
Depending on your product and history with your supplier, you may choose any combination of the following inspections. Products which carry higher risk factors at certain stages in the process may require more attention.
Hiring a professional quality control service also ensures that audit-level tracking documents record each step of the process.
One of the most important standards is the Acceptable Quality Limit (AQL). The AQL is defined in the ISO 2859-1 as “The quality level that is the worst tolerable.” It is based on a sampling methodology that should identify any quality issues. Over the course of several inspections, AQL testing demonstrates your products’ compliance to industry standards.
1. Raw Materials at the Factory
Low quality materials rarely make high quality products. Raw material receipts secure a baseline for the foundation of your product, particularly when your product must meet government regulations and customer expectations.
If poor raw materials are used, then they will likely impact the appearance, function or chemical composition. This means that for certain product types, if the raw material is not correct, you will not get the product required at the end of the production line. This can be a particular type of yarn in a garment or the type of wood to build furniture. In terms of time and financial risk, raw material inspections can save entire productions from getting reduced to scrap.
It is also a useful check to confirm that lead times any supplier has already committed to are on time.
2. Early Stages of Production
Once goods reach the production line, early product checking inspections can begin. If manufacturers drill holes too wide or cut corners at the wrong angle, early identification is key. This should be based on a risk assessment on the supplier (history, relationship etc) and the type of product manufactured. To an extent, this also focuses on the manufacturing process as well to understand where the potential risks lie.
Like a dress rehearsal, early stage inspections distinguish immediate concerns. Corrections should be adjusted as quickly as possible to maximize the usability of remaining materials.
3. Middle Line Inspections (During Production – “DUPRO”)
Once production is significantly underway, in-line inspections assure that everything still aligns to specifications. Sort inspections may be necessary at this point in the process if inspections identify issues.
4. Pre-Shipment Inspection (PSI)
After production, but before packaging for shipment, inspections of products ensure that you receive products which meet your initial specifications. Typically conducted using AQL, PSI relies on the sampling based on the production volume against the agreed inspection standard. Before incurring the cost of shipping, it is vital to validate your product. PSI represents the last opportunity to accept or reject factory manufacturing before shipping the goods.
5. Loading Containers (Loading Inspections – “LI”)
Oversight in packaging specifications can lead to factory-primed goods arriving damaged beyond recovery. Ensuring proper loading of pallets and boxes increases the likelihood of the goods surviving any shipment on the sea. Container seal numbers are commonly provided at this stage to maintain the integrity of the shipment from port to warehouse.
6. Sort Inspections (Any Stage)
If an issue arises at any point in production, sort inspections may come into play. They establish an exact count of which products are affected and which are not.
Sort inspections isolate impacted units and remove them from the process. Only products without the defect move forward.
Which Inspections Does my Business Need?
The best combination of inspections depends on both the supplier and the products’ risk factors. Fragile products, or those which must meet high standards for sale, require more attention throughout their production. Some companies may not offer the inspections best suited to your business’s needs.
Quality control services not only conduct these inspections, but are responsible for compiling data and relaying it to their clients. It is important to discuss how often such information is shared and during which points in production.
Our experienced team at ET2C International is here to service your quality control needs. Transparency and accountability drive us to continually improve our inspection communications capabilities.
Contact us to learn more about how we can minimize wasted resources and stabilize your product quality standard.
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Why Do You Need a Sourcing Agent in Asia?
A sourcing agent in Asia leverages your company for greater potential growth and success.
Access to the internet positions the world at your fingertips. Timbuktu endures as a place of legend, but its distant landmarks materialize on your screen in the blink of an eye. Similarly, at the press of a button you can connect with manufacturers on the other side of the world.
It is possible to identify ‘partners’ from the comfort of your own home or office, prompting some companies to buy from suppliers at arm’s length. But they miss out on one of the most valuable services in their supply chain. Qualified sourcing agents in Asia introduce expertise capable of saving time and money along every step of the process. From identifying cost-effective sourcing materials to conducting audit-level quality control checks, professional sourcing agents devote care to managing their clients’ sourcing needs.
Why Source from Asia?
Improved manufacturing capabilities and low labor costs cement Asian sourcing opportunities as some of the most cost-effective in the world. Although China has been the dominant force for the past two decades, other regions such as Vietnam and India are developing a breadth of manufacturing.
At the government level, both China and India have committed to investing in smart manufacturing. Their efforts are developing a manufacturing base for the future that is driving efficiencies through technology.
China
With the implementation of the Belt and Road Initiative and “Made in China 2025”, China doubled down on commitments to increase transnational supply chains and advancing sustainable manufacturing techniques. One of the pillars of modern outsourcing, China has developed complex supply chains across a vast range of product categories.
Vietnam
Vietnam earns recognition as one of South-East Asia’s fastest growing manufacturing nations. With a lower cost base, it has a comparative advantage in certain categories. A wealth of free-trade agreements reinforce Vietnam as manufacturing hub of the future.
India
With a newly elected pro-business government, India is entering a bright era of skilled manufacturing and production. Best known for expertise in textiles and electronics, the nation is expanding their horizons with Prime Minister Narendra Modi’s “Make in India” campaign. Following the recent election, India is now committed to further investment in technology for the manufacturing sector.
How a Sourcing Agent in Asia Can Help You:
Sourcing agents in Asia can help companies of all sizes source in the region. Scalability and breadth of resource is something that is particularly beneficial. Whether you have just started searching or are looking to enhance your vendor penetration and supplier management capability, sourcing agents present opportunities that a direct sourcing model may struggle to find.
If You Have Never Explored Opportunities in Asia Before
You may feel the risks outweigh the benefits to give it a go without any support. There are certainly suppliers (on platforms like Alibaba) that warrant skepticism and may present pitfalls when it comes to product quality. Sourcing agents, especially those with more years of experience, are some of the finest domestic resources for building your new supply chain.
For companies looking to outsource manufacturing for the first time, entering the market with a sourcing agent in Asia that you trust is equivalent to sitting before a judge with an experienced lawyer as your counsel. They know how the system works and will ensure that your interests are protected whether quality or price.
If You Already Source from Asian Suppliers
A direct sourcing model requires ‘on the ground’ management. In whatever guise, having the ability to develop deep and meaningful relationships will put you in good stead in the future. Just as if your company was manufacturing in your local market, there would be an expectation that you would need to visit and have visibility of any production.
Of course, companies are now able to go direct to suppliers across Asia. It depends on resource and capability in the company doing the sourcing. For example, a sourcing company can help bridge the communication and time difference that companies outside of Asia will face.
There is also an opportunity to leverage breadth of resource and expertise which already exists in-house. When you engage directly with suppliers and manufacturers, you need to manage multiple relationships. With a sourcing agent at the helm, what used to be numerous check-ins, six with suppliers and two with third party quality control, reduces into a single meeting encompassing your entire supply chain.
If You Encounter Communication Issues or Inconsistent Quality
Vendor accountability can be one of the most frustrating aspects of managing your supply chain. If you don’t have visibility of your production until items are fully “produced,” there is a wide margin for error. Miscommunication and insufficient quality control can ruin entire shipments and waste hard earned cash.
Qualified sourcing agents and companies arrange quality assurance checks along every step of the process to ensure early identification of any issues and present viable solutions. From sourcing from certified suppliers to load monitoring inspections, some agents cover your entire supply chain with transparency. Others may only cover sourcing and require clients to hire their own third party services. Be sure to verify exactly which services your sourcing agent is willing to perform.
If You Plan to Expand or Launch New Products
While your current capability might be sufficient for the time being, you might want to grow in the future. Suppliers may not be capable of taking the next step forward due to their own limitations.
Sourcing agents specialized for your industry are well-equipped to help you expand your business. With a wide range of suppliers, sourcing agents can not only manage potential problems upstream at the factory, but also help you consider the best way forward.
Sourcing agents can also play an integral role in enabling companies to scale their businesses. The allocation of resource combined with local expertise can ensure that a broad supplier base is easily managed.
If your company plans to expand production in their five-year plan, now is the time to connect with a sourcing agent.
How to Choose the Best Sourcing Agent for Your Company
Identifying an agent or company which understands your sourcing strategy and drivers can be a challenge. To learn more about what factors to consider when choosing the best agent for your company’s individual needs, check out our last article here.
We at ET2C International value understand your needs whatever size of the company. We would love to discuss how our team can provide sourcing solutions for your individualized needs. No matter your current sourcing situation, our team can assess your current sourcing strategy and identify potential opportunities. Contact us to learn more about what we can do for you.
5 Key Benchmarks for Your China Sourcing Agent
Evaluating the Effectiveness of Sourcing Agents:
Properly vetting a sourcing agent in China can make or break your supply chain. Identifying a sourcing company with the right connections and a track record for success prevents costly delays and communication pitfalls. While it does cost money to hire a guide, a local perspective minimizes the likelihood of chasing dead ends.
1. Integrity & Accountability
When it comes to finding the right partner for your company, there is no better option than an organization that has a track record of integrity and accountability. Trust and an ability to develop a long-lasting relationship with a sourcing agent will be integral to the effectiveness of the partnership. This gains particularly importance given the region that you will be operating in.
Whether it is supplier selection or management, product development, quality assurance or price negotiation, you want to be sure that your sourcing is agent is doing the work on the ground that will deliver an upside to your gross margins.
2. Quality Control
One primary concern when sourcing from China is the idea that quality will fall below acceptable parameters. There are factories which will cut corners and deliver products that do not meet expectations. Sourcing from a country halfway around the world creates a wide potential margin of error. Without measured quality-control checks throughout every step of the process, unsatisfactory materials become sub-par products.
While bad business deals do exist, strategic sourcing companies help you to navigate through unreliable sources to find high-quality suppliers and manufacturers. With a sourcing agent in China guiding you to certified suppliers, well-tested with a quality track-record, you can side-step the costly mistake of buying materials you cannot use.
By providing third-party quality control checks at every step of the process, your China sourcing agent should be able to provide an audit-level review of production meeting or exceeding standards. Early correction reduces transportation fees and emissions by preventing unsalable products from ever being shipped.
It is important to make sure that your sourcing company understands the certifications and standards required in the manufacturing of your product to ensure that they are capable of translating your needs to their suppliers and other contacts.
3. Risk Mitigation
No matter how many safeguards you put in place, there is always a risk that things will go wrong. But how wrong depends on the measures you take to prevent small hiccups from swelling into pricey delays. Having a dedicated team of sourcing agents on the ground can be one of the most effective tools for curbing potential error.
With sourcing agents working in the same time zone as manufacturing, communication with suppliers and manufacturers flows without interruption. At the first sign of unexpected issues, sourcing agents work swiftly to correct anything that needs to be done, from filing amended documentation to mitigating disruptions in the supply chain.
Instead of waking up to an urgent request sent while you were sleeping, you can rest soundly knowing that a qualified team is working to absorb the effects of missteps as they occur.
Business relies on taking not only risks, but well-calculated risks.When evaluating a company’s ability to mitigate risk, it is important to consider what services they offer. Companies with procurement and supply chain management services are more likely to be capable of responding with strategic solutions to issues beyond sourcing alone.
4. Network Strength
The best sourcing companies dedicate years to building up solid relationships with local suppliers and manufacturers, consistently vetting their powerful network of trustworthy partners to ensure that they are certified and capable of fulfilling quality orders.
Relationships take time to develop, but tapping into the carefully cultivated pool of suppliers shortens the distance between both parties. Just as an introduction from a trusted friend can elevate a conversation with someone new beyond small talk, sourcing companies take the tedious scrutiny out of meeting new suppliers.
5. Transparency
Gone are the days in which Sourcing Agents did not disclose the source of the products. Visibility is a must across the supply chain and sourcing agents should be walking you through as much detail as your business needs. For example, Sourcing companies should understand the value of knowing where materials originate, how workers are treated, and frequent updates relating to scheduling. Not only does such information make your supply chain transparent and allow constant supervision, but compiled documentation is easy to track for auditing purposes.
Before employing a sourcing agent in China, it is always a good idea to research which certifications and standards they uphold. Increasingly, from an ethical standpoint, having a granular understanding of where your products are made is essential. You should look for sourcing agents that do not just understand this but also preach this. In such a vast market, there will always be contacts that, in addition to assuring quality, operate in line with your company’s values. You should also get some current client references from similar markets to your own.
Your China Sourcing Agent Should:
- Have a track record of integrity and accountability
- Assure Certifiable Quality
- Deal with Unexpected Issues
- Work with a breadth of Suppliers
- Exercise Transparency across Production
- Understand your sourcing strategy and drivers
- Identify any issues early and present solutions
Where to Find Your Sourcing Agent
While it is possible to find independent agents through online searches or trade shows, working with a sourcing company should present a competitive advantage. They will provide the ability to scale your production in a low risk environment whilst breaking down the barriers of managing suppliers directly (culture, language, time zone, market knowledge, product knowledge, etc).
As opposed to a multiple contacts across a range of suppliers, sourcing companies should provide a single point of reference that utilizes their own internal resources to provide you with cover for a competitive price. For more information about how to select the best sourcing company for your business, check out our last article here.
Here at ET2C, we understand the importance of these elements because we practice them every day.
We can be your next China sourcing agent, working tirelessly to manage and enhance supply chains, mitigate risks, and drive efficiencies. With more than 2000 supplier contacts across China, Vietnam and India, ET2C is always looking to identify the best partner for your sourcing needs. Whether you would like to know about anything from reviewing sourcing certifications to introducing full-scale Supply Chain Management, contact us for all your strategic sourcing needs.
How to choose the Best Sourcing Company for Your Business
How Do You Find Your Best Sourcing Company?
Now that you’ve decided to explore your supply chain options abroad, hiring the best sourcing company for your business can mitigate costly issues in the supply chain. In a time when customers are demanding ethical, eco-friendly, and long-lasting goods, it is more important than ever to engage in transparent and strategic sourcing.
Unfortunately, even the most environmentally-minded consumer limits how much they are willing to spend on a product. Sourcing in Asia represents an opportunity to fabricate products at reduced prices without sacrificing quality, but hosts a range of latent miscommunications and risks. Thankfully, hiring a sourcing company can save time and diminish liabilities.
Why Should You Hire a Sourcing Company?
Once a company decides to invest capital in any venture, it is worth their while to hire consultants capable of sidestepping costly issues. Just as hiring a lawyer to review a trademark prevents lawsuits, strategic sourcing companies are worth every mistake their clients don’t make. From properly filing documents to exercising local business etiquette, minimizing missteps maximizes profit. Discovering your best sourcing company can also free up your valuable time to focus on other aspects of your business.
Sourcing Country or Countries
This may seem pretty simple, but it’s important to consider the origin of your products based on a complex web of factors. While it may have historically been cheapest to produce your product in China drivers such as local import duties might make other Asian markets more cost competitive overall. Determining the best possible value for your product at your price point requires an understanding of not only local markets, but regional and international markets.
Each sourcing company in Asia retains access to different suppliers and factories. Some are solely market specific and only operate within China or India etc. If you have done adequate due diligence and know exactly which markets best serve your company based on your product mix, a direct to supplier approach may be appropriate. However, if you harbour uncertainties about which country will supply the best value, international sourcing companies provide the opportunity to evaluate several markets at once. This is increasingly important given the current international trading landscape.
Sourcing companies with ties to several countries can also restructure your supply chain should better opportunities in other countries arise. For instance, tariffs imposed on one nation may make another more desirable for lower importation fees, or a country’s government subsidies for products in your industry may reduce costs. International sourcing companies can help reevaluate the supply chain over time to ensure that your business is not over reliant on any one country.
What is Strategic Sourcing?
Sourcing is “a strategy in which a business seeks to find the most suitable location for manufacturing a product”. Rapid growth of manufacturing capabilities across Asia and low labour rates drive the region to be one of the most cost-effective for outsourced production.
Sourcing
Before you can determine which is the best sourcing company suited to your needs, you must decide what sort of service you need. Depending on your familiarity with the market, level of desired support, volume of spend, in-house capability and ability to appropriate time and funds, you may want to explore the different options available.
The best sourcing companies spend years developing connections in their regions and when you employ their services, they grant you access to their vast network of certified suppliers and manufacturing contacts; visibility across production should be an integral part of any supply chain given quality requirements. Touching base with a sourcing company before production begins ensures that you acquire an understanding of the realistic capabilities of your manufacturing partners, from reasonable pricing and quality to practical timeframes.
Strategic Sourcing
Procurement is “the acquisition of manufactured goods from an outside external source.”If sourcing alone sounds useful but a little daunting, procurement services take a holistic approach to the process of fabricating of your product. Supply Chain Managers work with you to develop the strategy of how your product will be sourced, assembled, and even shipped. If the thought of messing up the logistics is holding you back, procurement services work with you every step of the way to ensure that the process runs as smoothly as possible.
For companies looking to re-evaluate the efficiency of their existing supply chain or maximize the benefits of a new project, supply chain management relies on personalized sourcing solutions to minimize supply chain disruption, quality defects, and other issues that can quickly escalate.
If you’re not certain which option makes the most sense for your company or you want to understand your options when sourcing from Asia, then consulting with expert sourcing agents can help determine the best path for you to pursue.
ET2C Sourcing Solutions
While a wide range of companies and individual sourcing agents can manage your supply chain, ET2C offers a few unique additional services. We believe in a transparent “boots-on-the-ground” approach for businesses to access their supply chains.
Dedicated Team (“Buying Office”)
Sometimes international companies want a more hands-on approach and our buying office service provides upstream access to their supply chain. Through a dedicated team with the relevant experience, ET2C helps manage the ‘on the ground’ sourcing function in the corresponding Asian market. It is a cost effective way for companies to leverage the benefits of Asian sourcing whilst removing the risks.
Sourcing Teams
ET2C merchandise and quality teams translate expertise across a range of categories that cover China, India and Vietnam. With the option of organized, single-point vendor management entry, companies can reduce time and effort trying to coordinate a series of vendors. A large pool of suppliers and manufacturers drive highly competitive pricing and increased efficiencies. Quality assurance is of utmost importance and ET2C’s partners assure ISO, ETI, and SA800 brand protection compliance.
Whether you’re seeking advice or full-scale Supply Chain Management, contact us at ET2C for all your strategic sourcing needs. We have a dedicated team primed to find sourcing solutions for your company through our network of over 2000 supplier contacts across China, Vietnam and India. Our mission is to deliver long-term sustainable value to our clients’ supply chains that creates cost and quality benefits to their purchase channels from key global sourcing markets, while ensuring the sourcing process is simple, easy, and convenient.
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