Prod Story 3: What Partner?

So you have an idea, you know where you want to go but how to pick the right people to bring your dream to reality?

A question that has a number of perspectives and steps to correctly answer, but the old adage is helpful and true, 'You get what you pay for', if you pick a cheap supplier expect the result to be bad, if you pick an expensive supplier expect the result to be good but you probably won't make enough money from it to matter. The dream here is a win-win scenario where everyone gets what they want, but the truth is both sides want to be the only ones to win, you want the best quality for the best price, they want the most profit for the least investment, a balance is needed and finding one takes work

It is also important to point out that you need to be savvy here, and altruistic ideas will result in you being cheated, suppliers are not there to be your friend, they are they to make you think they are while they steal as much as they can, and so they should! The chances are that if you are a success you will move to another supplier anyway so everyone has to protect themselves. If you think you have gotten a good first quote from the supplier either;

1. They haven't fully understood your request

2. You don't understand the real costs associated

3. The supplier really wants your name on their customer list

4. You have something new that the supplier wants to copy and offer to other customers

5. You're ordering a lot of product!

It is also critical that regardless of the stage of your company, never limit your options to 1 single supplier, you need comparisons to keep your supplier and your own team honest

There are a number of steps to finding that partner, they are explained briefly below:

How to Find

It is easy to find many options through different methods:

• Online searches

  • Alibaba

    • China-based with hit-and-miss reviews

    • Huge Database with good, bad, and fake options

  • GlobalSources

    • Mainly China with some SEA and mixed reviews

    • Good Database with wide options but mixed quality

  • Kompass

    • Worldwide support with mixed reviews

    • Massive option base, but not well maintained

  • Europages

    • Europe-based with positive reviews

    • Good and reliable for Europe but narrow industries and expensive

  • Thomasnet

    • US-based with good reviews

    • Verified suppliers but narrow coverage and expensive

• Trade shows Generally, a needle in a haystack exercise unless you are targeting suppliers who you know are exhibiting, Trade Shows are good for making initial personal contact

  • CES

    • Wide supplier base

    • Huge show but focuses mainly on Consumer Electronics

  • Canton Fair

    • China only supplier base

    • Huge fair for local suppliers but very busy and generalized

  • Hanover Messe

    • Europe Centric

    • Worlds largest fair with cutting-edge options but requires time and effort and will be expensive options

  • CIIE

    • China and Asia suppliers

    • Broad range of suppliers at different levels but requires asia knowledge to navigate

• Support Companies Utilizing middlemen companies for SMEs makes sense as it removes the need to in-region teams but they need to be carefully selected, pushed, and engaged Companies like China2West, Production Partners, and ODMgroup are companies that have long histories in China and SEA, they are a good starting point and comparison to use

• Personal referrals If you have the network to support through this method it is the best way as you can get support from your network and each subsequent step will be easier than going in cold

How to Choose

Choosing the right supplier can be a daunting task, but it is essential to evaluate potential suppliers based on several criteria and a final selection should never be made without visiting the final few locations:

• Quality: Quality should be your top priority. The supplier's quality management system must meet your base needs. Look for certifications such as ISO 9001 or AS9100

• Cost: Important but cannot be the sole determinant in choosing a supplier. Buy cheap get cheap, and expect quality, communication, delivery, and every other kind of issue if you just choose on cost

• Lead time: Another critical factor to consider. Not only their commitment but the robustness they commit with and the detail they provide for how they will achieve it as most will not commit with penalties so if they cannot explain how they will ensure delivery, don't believe it

• Communication: Clear and open communication is crucial when working with a supplier. Ensure that you have a devoted PM and know the names of the team involved, make sure the names don't change, and if they do you know why. It is standard practice to overload team members without customers knowing and avoid informing of changes. A good supplier should also be willing to work with you to resolve any issues that may arise during the manufacturing or assembly process and not hide them

• Compatibility: It's essential the supplier is compatible with your culture and values. Look for suppliers that share your ethos and consider this in the final selection

What to Check

Once you have selected 3-5 final potential suppliers it is essential to conduct due diligence and verify their capabilities and reputation via audits and visits:

• Quality Control: Check quality control processes and certifications Suppliers that are transparent about their quality control processes are more likely to be reliable

• Development and Manufacturing Capabilities: Ensure that the supplier has the necessary equipment, expertise, and capacity to develop and produce your components or finished product

• References and Reviews: Contact the supplier's references and reach out to online reviewers to gauge their reputation and performance

• Financial Stability: Ensure that the supplier is financially stable and has the resources to fulfill your order You may want to request financial statements or credit reports to verify this

When to Check

Once found and chosen, regularly monitoring your supplier's performance is crucial to ensure a smooth collaboration

Conduct periodic checks (remote and in-person) to evaluate quality assurance, delivery performance, communication, problem resolution, and cost management

By assessing these you can address any issues promptly and maintain a healthy supplier relationship which is critical to ongoing collaboration

This proactive approach enables you to identify potential problems early on, mitigate risks, and ensure that the supplier continues to meet your expectations throughout the partnership

How to Check

Once you have chosen a supplier, it is important to continuously monitor their performance to ensure that they meet your expectations

Remote and on-site checks by yourselves or Support Companies is needed to ensure smooth progress

It is critical to monitor:

• Quality: Periodic audits checking quality standards, inspecting samples, and conducting product testing

• Delivery Performance: Monitor ability to deliver on time

• Communication: Regularly assess the supplier's communication skills and responsiveness

• Problem Resolution: Evaluate how the supplier handles and resolves issues that may arise Assess their willingness to take responsibility, provide effective solutions, and prevent similar problems in the future

• Cost and Pricing: Periodically review the supplier's pricing structure to ensure that it remains competitive against alternative suppliers Evaluate their willingness to negotiate and provide cost-saving alternatives without compromising quality

Why to Keep

Determining if a supplier should be kept or replaced requires a cool evaluation process removing emotional attachment and determining based on performance if a supplier is valuable or alternatives are needed

Long-term relationships where possible are extremely valuable and suppliers who are good partners, reliable, innovative, and cost fairly are gold dust, but maintaining the same supply chain without competitive auditing and bidding can result in suppliers feeling safe with your orders and not prioritizing or offering advantages anymore, it is critical that if a better option arises it is taken seriously and never put all your eggs in one basket regardless of any factor

Conclusion

Choosing the right component, manufacturing, or assembly supplier is a critical decision that can significantly impact your product's success. By considering factors such as quality, cost, lead time, communication, and compatibility, conducting thorough checks, and monitoring supplier performance, you can establish a strong and sustainable supplier relationship. Remember, a reliable supplier who consistently meets your expectations contributes to the overall quality, efficiency, and competitiveness of your products but make sure they do not become complacent and always keep your eyes open for other options