Building a global sourcing network can be quite a daunting task, even for multinational corporations with ever-growing bank accounts and highly qualified specialists. Your small business might even wrestle all the areas and create an infrastructure that offers flexibility to every action, or you can outsource the entire process to a trading house or stateside manufacturer.

Product fuels practically every choice in global sourcing, from outlining the region with the most experienced manufacturers to instituting testing procedures for compliance with product-specific governing standards.

Choosing a Contract Manufacturer

Selecting a manufacturer from a surplus of potentials worldwide can be overwhelming. Begin by locating a country, province, and industrial area that dedicates itself to your product category. Find plants that have the ability and competence for manufacturing what you need. Visit the factories in person to see the manufacturing process and equipment. And, see if they have any machines for product design, development, and quality control testing. Remember that many factories may own, represent, or subcontract for other factories.

Depending on the use and intricacy of your product line, the estimation and selection process may consist of raw material sourcing. Manufacturers will usually have their own suppliers but you should seek other sources that offer unique parts or better pricing; using outside help, though, normally means that your business is responsible for raw material availability and transportation.

International Compliance

Confirm that manufacturers obey all standards: environmental regulations, labor laws, customs, product standards, human-rights standards, etc. Follow a tiered system for this process:

• · Verify overall compliance and apparent violations throughout initial investigations.
• · Perform a detailed evaluation procedure before placing a buy order or involve a third-party in verifying factories.
• · Carry out sporadic audits to guarantee ongoing compliance.
• · Follow legislation and verify compliance with new laws.

Set your own terms with manufacturers that may exceed requirements or accept industry-recognized standards. Think about using third-party agents to perform random checks, so you apply this expertise while gaining a firm understanding in manufacturer selection.

Product Development [PD]

You may have an original product backed with a patented design, something that can be bought directly from a current line, or anything in between, either needing basic modification (logo) or a complete change (specific raw materials).

Unless you are sourcing a common product, build a development model to take care of all the communication for your company and the factory. Give the manufacturer the necessary information about product needs such as plans, pieces, and specifications. Preferably, mail a prototype to minimize any mistakes or to build upon it with modifications.

Demand a sample, check for compliance, express any concerns about changes or alterations to the factory; repeat the entire process until you are pleased with the results.

Quality Assurance [QA]

A QA program will help your business get the right look, feel, and use out of your product. Start QA efforts during the product-development stage by supplying detailed stipulations to manufacturers; go over any problems such as product dimensions and features. Build and discuss needs relating to part testing, in-process reviews, and final inspections, along with satisfactory results and approval times.

Production Control [PC]

Confirm that your factory can finish production and send out orders agreeing to set times. Ask about volume and overall timeliness when assessing manufacturers, but don’t end it right there. Keep on talking to discover and determine production problems (raw material delays or full production glitches) before they turn into costly mistakes.

Transportation & Logistics [TL]

Examine any alternatives for transporting freight from global locations to your destination, which could consist of air, ocean, rail, and trucking routes. Cutoff dates, lead times, ports of call, and booking arrangements are all relevant to your shipping requirements. Remember to research any legal issues related with customs.

See if you’d prefer to handle the shipping and ownership during the course of transportation, or if you want to take control of the merchandise when they arrive at your company’s warehouse or at a neighboring port. Establish procedures for detailing, tracking, and troubleshooting all stages, which will comprise of describing lead times for transferring titles of shipment on top of payments and paperwork for U.S. customs.

Negotiate

Negotiate all facets of your sourcing program, not only product pricing. Construct purchase agreements with fine points, such as delivery schedules and what type of packaging materials to use.

Do everything yourself to save money or hire others (trading houses, brokers, vendors, etc.) to save time and manage risk.