The fact that factory owner’s attitude is extremely important. Make sure that he has integrity in doing his business and won’t take any shortcuts.
Make sure that the factory or supplier that you are working with, is capable to manufacture and deliver the products that you need.
Do not compress the production lead times (unless, you can show them how to plan and execute better). If you set a shipment date that can’t be pushed back and you hold production because some approvals are not finalized, you are placing the manufacturer in a position where they have to subcontract.
One useful tool is the production plan. You can request that your suppliers describe in an Excel file how many operators and how many machines will work on your order, for what daily output (if possible at the level of each process step), and for what ETD.
It’s an often case when the owner wants to buy the parts from his friends/family. The solution is to double or triple source the parts that have the longest order lead time. Similarly, a simple value stream map exercise can show where the bottlenecks are located in their production.
Make contact with another suppliers as a backup. This also good for you when you have a choice between 2 suppliers, and you can assess, which one of them will give you the best option.
It is common to sign a contract that makes it forbidden to subcontract. If your contract is legally binding in China, and if some other customers don’t have such a contract, the manufacturer might think twice before subcontracting your order.
The usage of inspections during production is extremely important for this case! Inspection during production will help you with:
A direct use of some suppliers is an opportunity to get information (through these sub-suppliers) on the rate of ordering and the delivery addresses. If you don’t want to manage your supply chain this way, you can do it easily with some labeling/packing materials.
Adopted from Quality Inspection
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