You’ve successfully vetted and started working with a new Chinese supplier. What’s next?
In our mini-series on vetting Chinese suppliers, you will already have learnt about due diligence, factory audits and visits, exploring testing facilities, and much more when it comes to vetting suppliers. If you follow through this process logically, perhaps with the help of local factory auditors and quality inspectors in China, you will be well-placed to find reliable suppliers who reach your expectations. But how do you carry on getting the results you expect from your new supplier once you have been working together for a while?
Tips and steps to take to continually get good results from your new supplier are what we round off this mini-series with here. We’ll discuss some of the common scenarios you may face in your new relationship, such as nurturing a backup supplier who can step in if there are problems, developing your supplier to improve quality over time, switching from an underperforming supplier to a new one, or facing an unexpected price rise, and what you can do to combat or overcome them.
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Here’s a summary of key sections of this episode:
✅ Why the series on vetting new suppliers is so helpful for buyers who are new to sourcing suppliers from China
✅ How and why to develop a backup supplier. This takes extra work and requires you to be placing large enough orders to ‘sustain’ 2 suppliers, but if things do go wrong with your main supplier, especially if they produce key products or components that you can’t do without, having a backup may be invaluable.
✅ When to switch to a new/backup supplier if things are going wrong with your current one? At what point are things ‘bad enough’ to switch suppliers? Some examples are given here.
✅ The typical ‘vicious circle’ a buyer can fall into with a bad supplier. This is an interesting example of how suppliers stay with bad suppliers who keep disappointing them, even though they should leave, costing time, money, and causing a lot of stress.
✅ Dealing with unexpected price rises. No one likes being surprised by an unwelcome price rise and existing Chinese suppliers can sometimes try to squeeze customers. So how to determine if the rise is warranted, and how to negotiate it down?
✅ Developing suppliers based on their quality performance data. Over time a trusted supplier should produce your goods as per your quality standard without deviation, but, depending on the type of supplier, you will need to run product inspections to gain data and drive improvements based on quality performance or be able to inspect them less as they’re at a high level.
✅ Tracking supplier performance and reviewing it over time – Ultimately, you need to keep monitoring whether a supplier ‘can be trusted.’ There are performance statistics such as quality inspection pass rate, average defect rate, on-time shipments, serious issues found after shipment, and more, to track and examine. If these statistics are great, you can reduce time and money spent on monitoring quality and lab testing. If not, you can work with the supplier to improve matters or switch to a new option.
Keep reading about how to maintain and improve results from Chinese manufacturers here:
Take a look at these blog posts and pages which accompany this topic:
- Here’s how to keep a backup supplier in case things don’t go well with your main option.
- Here is how to prepare yourself for if Chinese suppliers raise their prices unexpectedly.
- When you have even one bad experience with an unreliable supplier, don’t place a re-order. Go to your backup instead.
- Our Contract Manufacturing subsidiary, Agilian Technology, just released this tool to help you assess if you need to switch to a new Chinese manufacturer.
- Guidance on how to adapt your quality control strategy to the reliability of each supplier.
- Follow this advice about how to develop your key suppliers over time.
Which of these scenarios have you faced? Do you have any other tips to share?
Let us know your experiences by leaving a comment, please.
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