In today’s always-connected, technology-driven business landscape, it would seem as though a company in the U.S. could do business with a company anywhere else in the world – without ever even sending a representative to the other country. Videoconferences, email, and the global internet mean that facetime is no longer necessary – right?
While that may be true in some – maybe even most – industries, manufacturing is not one of them.
This is especially true in global manufacturing, which is why my company, Pivot International, maintains a steady presence overseas at the Asian manufacturing facilities that we own. Here are a few reasons why you need to expect to have “boots on the ground” if you’re manufacturing a product globally.
In many Asian countries, face-to-face relationships are essential in business.
Business customs differ from country to country and region to region. In the U.S., building face-to-face, personal relationships isn’t absolutely necessary – it’s preferred, perhaps, but plenty of business collaborations, deals, and transactions are completed without the primary actors ever meeting face-to-face.
That’s not the case in Asia. In Manila, the Philippines, and in China, where many of my company’s clients choose to manufacture their products, it’s expected that a company will have a consistent physical presence in the country in which they’re manufacturing.
That might mean setting up a full satellite office, or sending one or two representatives to the country for a few months. Whatever you do, it’s something you have to be prepared for – otherwise, you could find that the cost-savings you were hoping to achieve by manufacturing overseas in the first place are canceled out.
Manufacturing a physical product requires physical inspections.
When manufacturing a physical product, the last thing you want is to have a thousand units that all have some tiny, but noticeable flaw.
While any reputable manufacturer will have good quality control systems in place, it’s still a good idea for someone from your company to be available to physically inspect a prototype. This is especially important when you’re just beginning a relationship with your manufacturer.
Managing problems is much harder when you’re halfway across the world.
In any business relationship, challenges, misunderstandings, and problems are bound to occur at some point.
When these happen during a manufacturing process, time is literally money. You need to be able to address any issues as quickly as possible, so your products can get out of the factory and into the hands of your customers.
Flying from the U.S. or the U.K. to Manila means at least a day of lost time before you can be there to see what’s going on and help create a solution.
Now, sometimes this is simply unavoidable. Maybe the person who needs to approve or fix a problem is not the person with the presence in-country. However, having a representative on the ground in your manufacturer’s country can, in many cases, mean saving a good deal of time and making it more likely that you’ll meet your production timeline.
Global manufacturing is most likely to be successful when your company has a physical presence near your manufacturer – or when you’re working with a product development firm that can offer the presence you need. For more on this topic, read my post “6 Common Manufacturing Mistakes to Avoid.”