Dealing with Production Problems in China

Have you ever dealt with production problems, sub-standard goods or an unacceptable delay? Perhaps even a project that came to a full stop without warning. Follow these tips to help overcome production problems with your Chinese suppliers.

Keep a representative or local third party inspector on site in the factory. This is the only way you really know what is going on. You need someone who protects your interests on site. Mawson Global’s on the ground team will make sure our client’s needs are understood and acted on by supplier management.

Monitor progress closely. Shaking hands typically is not enough to ensure production will move along at a satisfying pace. More importantly, if you notice a factory is not moving in the right direction for even a few days, contact them immediately and try to understand why.

Complete a quality assurance check prior to any shipment. Even if you have a small order, any set back during production may have resulted in rushed production. Overall, not doing a final inspection prior to shipping will be more expensive than getting a third party to ensure that the products fit your quality guidelines.

Most of the production issues arise from selecting the wrong supply partner.  Make sure you are as important to the supplier as they are to you!  You can do this by selecting someone who is a similar size to your company, by making the time to personally visit the factory and by involving the supplier in your long term plans.

Mawson Global helps clients by developing and implementing strategies that remove the risk of sub-standard quality and that form lasting relationships with suppliers to ensure projects are completed on time at the right cost.

How to Choose a 3rd Party Quality Auditor

In global commerce, a third-party quality audit – one that’s completely independent of your supplier – is one of the best ways to minimise the risks of each transaction.

Defining Third-Party Audits
Unlike first- and second-party quality audits, an autonomous team of auditors -- with absolutely no connection to your supplier -- performs the audit. These auditors assess your product based on a set of pre-determined standards of quality (for example ISO 9000 or anything you specify) and consequently issue a certification of compliance upon completion of the procedure.

There are four types of third-party quality audits auditors use for evaluations, and each one examines a different facet of the product.

Product Audit - A product audit refers to a detailed inspection of the finished product before it is delivered to the customer. The term “audit” is a bit deceptive in this case since it’s more like a quality inspection.  By doing this correctly you will ensure the product you pay for is what is delivered!

System Audit - The quality system audit is just as it sounds. It analyses the various components of the production system, including how it’s used, who uses it, when it’s used, where it’s used, and why it’s used. Auditors take a comprehensive look at how these puzzle piece fit and work together to produce the product.

Process Audit - While a system audit is typically broad in nature, the process audit goes a bit deeper. It intricately assesses the nuances of the system. A process audit verifies aspects of the production process, such as the machinery, people, and materials involved.

Compliance Audit - During a compliance audit, auditors scrutinize your specified work instructions, contracts, obligations, and procedures associated with the product, and then compare them to what’s actually being done during the production process.

Selecting the Right Auditor
A third-party audit can be extremely useful in helping foster growth and improvement within your supply chain. Selecting the right auditor or audit team isn’t as cut and dry as calling a big brand or asking your supplier to recommend one.

First and foremost, you need to decide if you want a global auditing partner with international experience or one that’s local. If you’re searching for an auditor in your region, find a provider that specializes in your area of business. An apparel auditor isn’t going to do you any good if your company purchases drill bits. It’s also important to review the auditor’s previous work and check their references to ensure their expertise and credibility. Regardless of the type of auditor or firm you choose, make sure they provide advice on creating an inspection process your organisation can use after the audit is complete.

Getting an Audit Edge
If your company needs assistance in locating a qualified auditor or firm, Mawson Global has local knowledge on inspection agents who can meet your organisation’s unique needs. We are experts in global commerce with more than 70 years of experience in the field. We understand the importance of providing the highest quality products possible, and we are committed to helping you achieve that goal.

A New Kind of Growth: Global Sourcing for Agricultural Companies

As every farmer knows, the job is not without its difficulties.

Yes, agriculture can be lucrative. And the feeling of a good season is tough to beat, too. But even when that happens, it can bring some pretty sizeable expenditures with it.

Harvesters and other farming equipment cost tens or even hundreds of thousand of dollars. How can you shave these costs down?

Well, one way is to take part in a growing agricultural trend and source your harvesting equipment from cheaper parts of the world such as China, India and South America.

Savings of around 40%-70% are on the table. But there are a few things worth knowing to ensure global sourcing success for agriculture.

Schedule considerations

Naturally, the ebb and flow of summers and winters put significant schedule considerations on any farming operation. So when you’re adding a global supplier to your regulars list, overseas logistics must be weighed in to your timing.

Many companies from all kinds of sectors import various types equipment and products globally. But agricultural equipment constitutes some of the larger and more complicated products in freight over the world’s oceans.

While sea freight typically takes around four weeks, it can sometimes take longer for harvesters and other oversized agricultural equipment.

Naturally, you can discuss delivery times with your suppliers. But don’t leave your enquiries too late in the season. Otherwise by the time you make the phone call, you’ll have already missed the boat.

Quality Assurance considerations

Similarly, quality assurance is especially important to farmers. Having a piece of mission-critical equipment or a vehicle break down at a crucial point in the harvest cycle can cost a small fortune.

Many industries employ third-party auditors to assess products prior to shipping. Due to the complex and specialised nature of agricultural vehicles and equipment, it’s best to employ a specialist third-party inspector who knows exactly what to look for.

Similarly, safety regulations are different overseas than back home. Naturally, it’s important your country’s safety regulations are adhered to. A third party inspector will also ensure these specifications are met so you can legally use your equipment once it arrives.

Cultural differences

Farmland and the machinery used to work it varies greatly in different parts of the world. A good example is that China has much smaller farms areas, so the domestic tractor in China is considerably smaller than you might expect to find ploughing fields in Australia.

Consequently, the way different cultures think about equipment is different to the way you might be accustomed to. That, plus the language barrier, means that a policy of crystal clear communications must be adhered to if you’re to ensure you get exactly the product you’re looking for. Language must be unambiguous, and it’s best to spell every detail out clearly just to be sure. Never assume anything is obvious.

If you’re interested in the 40% to 70% average savings of sourcing agricultural equipment from overseas but want to make sure you get the ordering process right, contact the Mawson Global team for a QuickLook Analysis today.

What a Research Project Delivers

Research Projects Offer Mawson Global Customers Peace of Mind

Global sourcing can provide significant cost and time saving benefits to companies, while increasing their profits and strengthening their overall business. Yet the risks and time commitment required to successfully utilise global sourcing can be overwhelming.

If your company is considering global sourcing for one or several products, you need all the facts up front – before you make a decision. Mawson Global’s research project (RP) offers the vital information your company needs to make an informed decision about global sourcing. 

A research project provides a detailed analysis of global sourcing for a particular product. Projects are based on specifications, such as volumes and prices, you provide in a sourcing request document. Mawson Global then takes these specs and conducts comprehensive research on sourcing for that product, including:

Sourcing  recommendations – One of the most useful components of the research project is a list of reliable potential suppliers and their locations. Mawson Global starts with 30 to 40 supplies and uses your criteria to narrow down the list to the best possible matches. This detailed and proven process is what distinguishes us from other sourcing providers, and it’s what makes us your best ally for global sourcing your products.

Estimates and ratings – The research project offers a break down of numerous estimates, by supplier, for global sourcing a product, including approximate landed cost, current cost, potential wholesale price, retail price, potential profit and savings, margin, approximate annual volume, potential annual profit, potential profit in three years, and annual import spend. It also features ratings on each supplier’s efficiency, reliability, and quality system.

Product samples – We ship several samples directly to your office for review. This saves you time and confusion in trying to request multiple samples from various suppliers and discern one sample from another. 

Next steps  –  Mawson Global provides a detailed prospectus of the follow-up steps your company needs to take in order to maximize the information in the research project, including supplier visit and sourcing project information, and move forward with your global sourcing initiatives.

A research project is a valuable tool in determining whether global sourcing is right for a particular product, and ensuring your company maximizes the benefits of partnering with an international supplier. Mawson Global doesn’t just provide research into globally sourcing a product; we provide a full spectrum of services to assist you with the entire process – from start to finish. Get your free, no-obligation QuickLook Analysis by filling out our QuickLook enquiry form.

For more information about how Mawson Global can help you with all your global sourcing needs, please contact us online!

Tackling the Issue of Quality Fade

Quality fade is all around us, but many businesses and consumers don’t always know how to recognise this concept or know what they should call it.

Around the world, we’ve all been exposed to situations such as recalls for unsafe food products, cars with safety problems, dangerous toys, electronics and gadgets that break within days. Not to mention the buttons that fall off clothes on the first day or the zip that breaks in 48 hours after purchase.

This is ‘quality fade’, which describes a supplier systematically downgrading the quality of the products that a foreign buyer has contracted them to manufacture, in order to boost their profit margins.  Quality fade and the escalating business greed that drives it has become a significant issue for importers sourcing products from highly competitive low cost manufacturing countries, which notably include Vietnam and China.

Mawson Global experts regularly work with foreign companies who recognise they need support and assistance in establishing relationships with quality manufacturing partners in emerging and industrial countries.  Many of our clients have encountered deliberate quality fade problems in previous business dealings, with the excellence of early product runs and customer satisfaction frustratingly replaced by quality problems, customer complaints and lower sales over time. 

Sometimes quality fade issues are just annoying nuisance, but for other products such as foodstuffs or vehicles, profit-driven cuts pose a real risk to consumers’ health and safety on the other side of the world.

Unscrupulous factory owners will continue cutting quality and cost corners until confronted or exposed.  This is a common problem in China, with shrewd suppliers proffering plausible enough excuses if questioned, aware from experience that many international buyers will shrug off a small problem, believing it was simply a mistake.

We can introduce you to trusted suppliers who are serious about quality, helping you to develop a reliable long term manufacturing partnership. We provide advice on negotiations to achieve clear outcomes based on agreed specifications, structuring contracts before production starts that protect both parties; and on quality control steps which include setting up inspection procedures and standards.

We will advise you to save yourself future trouble and money by independently checking the factory before entering a working relationship.  Always work within formal contracts to avoid potential issues that often arise from more informal arrangements, which are found to be unenforceable in the manufacturer’s country. We recommend using a third party auditor regularly, or if you start to be aware of quality fade issues with a supplier.

Your contract with a manufacturer must specify that they take responsibility for product quality control, including catching defective products before they leave the factory premises and accepting liability for handling any quality problems post-sale. 

Over time, it is critical that foreign buyers maintain a close watch on product quality, to avoid the headaches of quality fade problems that increasingly impact your resources and bottom line. 

Developer and Manufacturer of Flavors and Fragrances Uses Global Sourcing

Organization: Developer and manufacturer of flavors and fragrances

Looking to Source: Flavours and ingredients

Results:

* Annual cost savings of more than $248,000.

* Rapid procurement of multiple sourcing options.

* Variety of pricing options from a select group of qualified suppliers.

The Objective

During the past seven years, our client has developed into one of the leading flavor houses in Asia. With its own flavor development laboratory and factory located with its home office, the company is has an impressive portfolio of clients that seek its flavors and fragrances. Searching for a way to save on the cost of the ingredients for a variety of its products, the company reached out to Mawson Global in an effort to reduce its expenses on raw materials, as well as identify a reliable global sourcing partner. 

The Approach

Mawson Global’s reputation as a leader in globally sourcing materials led the client to engage us to identify reliable global sources for its flavours and other ingredients.

The client has been expanding its business into Asian markets, so our China-based staff was able to strengthen these ties by identifying a variety of suppliers that meet the client’s product specifications and price point.

Using our proven rating system to identify the top suppliers, we were able to present the client with five different supplier options in China via our informative, easy-to-read Sourcing Report.

The Benefits

Significant Budget Benefits

Bottom line results: Because of Mawson Global’s global sourcing expertise, the client partnered with a vendor that will provide an annual cost savings of more than $248,000.

Perpetual bonus: Mawson Global operates on a fee-for-service model, which means there are no hidden costs or fees. It also means that the client pays for the service once, but will enjoy the benefits for years to come.

Flexible Alternatives

Multiple sourcing options: Mawson Global identified five reliable suppliers that matched the client’s requirements.

Growth potential: Because of Mawson Global’s efforts, the client now has the ability to quote more jobs and grow its business.

Future options: Because Mawson Global conducts a comprehensive search for sourcing partners, the client not only has acquired a provider for its current needs, it also has direct access to suppliers for future sourcing requirements.

An experienced team: One of the benefits of working with is that we maintain a staff in Asia. These team members have been with the company and average of six years, and during that time, they have sourced everything from colored glass to bubble wrap. They’ve also maintained a high rate of success thanks to a streamlined process for selecting trustworthy, reliable suppliers.

5 Benefits Global Sourcing Organisations Can’t Afford to Ignore

No matter your organisation’s size or the volume of your order, there is no question that global sourcing can dramatically increase your profits.

Many companies are still making procurement decisions based mainly on unit cost. But the global explosion of technology, well-educated workers, and capital has made it possible to literally have the entire world competing for the opportunity to sell to your business.

For most big corporations, global sourcing is not a matter of choice, but of necessity. The days of simply finding the best contract you can with suppliers with whom you frequently interact are gone. Now, you can partner with suppliers from across the globe.

Mawson Global understand the benefits of global sourcing – after all, we’ve been helping companies with it for more than a decade. However, we recognise that you might still need a little convincing. So, here are five advantages of global sourcing that you can’t afford to overlook.

• A reduction in costs, especially labour costs. Most Mawson Global clients save at least $100,000 on their first project, and their savings are typically 40 to 70 percent of domestic prices. In 2012, we saved our clients more than $19 million.
• Access to fresh research, design, and specialised intellectual capital.
• Availability of new technology and capacity. A number of companies source overseas because domestic suppliers lack the capacity and they’re not making the necessary investments to stay competitive.
• Superior quality. Many companies praise the quality of internationally sourced products compared to domestic products, mainly because of supplier investment in technology and capacity to attract global business.
• Companies can focus on their core processes and have more capital to invest in them.

Whatever product you’re seeking, Mawson Global can find you a reliable, more cost-effective overseas supplier. We have professional teams on the ground in Asia that help businesses around the world safely minimise any risks involved in global purchasing.

Mawson Global is confident that we can assess your potential cost-savings without disrupting your supply chain. We are not broker-agents; our services are fee-based, and we work without taking a commission. Our research and advice are completely independent and unbiased.

Utilising our services for your global sourcing needs is a simple process that provides you with all the information, feedback, and recommendations you need to successfully source your company’s products.

Want to know if Mawson Global sourcing is right for your company? Take our 10-product challenge. We’ll ask you to name five to 10 products that you now buy from an importer, and then we’ll work to find those items from a cheaper global supplier. The input is minimal – all it takes is a few minutes of you time – but the benefits will likely be substantial!

For more information about how Mawson Global can help you with all your global sourcing needs, please contact us online!

A Delicious Opportunity: How Global Sourcing Benefits Food Companies

They say that it’s the flavour that people remember.

If you work in the food industry, then you know this to be true. And, if you’re reading this article right now, it’s likely you also know that significant savings are on the table from globally sourcing food products.

But at what cost to the flavour might a 40%-70% saving come? After all, if you buy something from the other side of the world and just one ingredient isn’t quite right, people might remember your flavour for the wrong reasons.

But, not to fear. Although the food industry faces several unique challenges in global sourcing, the savings on offer can be realised.

Provided of course, you have a heads-up before make any changes to your supply chain.

Logistics considerations

The majority of global sourcing is done with seafreight which takes around four weeks. But, if something needs delivered quickly, then airfreight is an option and cuts delivery times down to just a few days. However, there are a couple of problems to be aware of with airfreight:

●     Cargo pressurisation
One problem is, depending on how delicate the food products you’re sourcing might be, pressurised cargo holds of air transportation can potentially affect the chemical composition (and ultimately flavour) of some products. It’s best to check up on this before you book any deliveries.

●     On-airport chilled facilities
Another issue is, not all airports have on-site chilling facilities for imported food products. So, if you’re having chilled goods imported from other countries, you’ll need refrigeration trucks on standby to take the goods into an appropriately cool environment.

When shopping for overseas logistics quotes, make sure you’re clear with the supplier about the nature of the transportation so you get quoted for chilled environments as necessary.

The subjectivity of taste testing

Outsourcing any kind of manufacturing and purchasing to countries such as Asia, India or South America often raises concerns over quality. And, the third-party auditor is the best tool the global sourcing supply chain manager possesses to ensure quality standards are met.

However, with food industry, things are different. For example, if a blueprint, materials list and design brief are sent to a hardware engineer anywhere in the world, it’s easy to recreate a piece of technology with exacting precision.

Taste testing brings a large degree of subjectivity.

Your idea of what constitutes “spicy” might be something completely different to a purchasing manager or manufacturer in a different part of the world. Especially if they’re from completely different cultures.

One way around this might be to visit the country yourself. Cultural differences in both business and social etiquette must be learned. But at least you’ve experienced the product firsthand before ordering.

Special auditing considerations

The fact that food is in the “perishable goods” category means a few more special considerations. Problems you can face in the food sector include out of date protocols, counterfeit documentation and immature risk assessment.

While tools and machinery products face their own challenges with hardware, a specialist third-party food auditor is especially important here. Products must be properly tested for genetically modified (GM) ingredients and other illegal additives depending on the regulations of your country.

In many less-developed countries, counterfeit legal documentation is common, and a strong internal quality system is required which includes 3rd party inspection.

It’s tough, but not impossible.

In one recent client success story with a flavour and fragrance manufacturer, Mawson Global managed to shave $248,000 off the annual spend while maintaining high enough quality for them to become one of the leading flavour houses in Asian.

To find out more, contact one of our global sourcing specialists today and get a QuickLook Analysis to see how much you could save while working with a company who cares as much about your flavour as you do.

South Australian and Shandong Province Business Relations

Strengthening Shandong Province and South Australia Relations

Adelaide, South Australia: Last month, Mawson Global was selected to work with the delegation from South Australia to strengthen relations between Shandong Province and South Australian. With 15 years of experience conducting business in Qingdao and based in Adelaide, it was great to see the success of South Australian businesses in Shandong.

The SA Premier, Jay Weatherill, noted Mawson Global’s success working in Shandong Province and emphasized the need to help other SA businesses achieve the same successes. These comments further underscore Mawson Global’s business successes that were noted in the ACBC 2014 Australia-China Trade Report.

Mawson Global’s successes in Shandong Province stems from a solid “feet on the ground” approach which provides greater access to supply chains and information.  Mawson Global’s proven process revolves around sourcing supply partners for businesses followed closely by effective quality assurance. This process aids in the transition from localised to globalised production.

About Mawson Global: Mawson Global, MawsonGlobal.com, is a leader in global sourcing and a visionary in international manufacturing. With more than 70 continuous years of international experience, the team at Mawson Global has the expertise necessary to help businesses maximize their global commerce potential. To learn more about how Mawson Global can make Asia easier for your company please email pevans@mawsonglobal.com.

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Decision, Decisions: 3 International Shipping Options

Selecting an international shipping method is a complex decision for any global commerce company. There are numerous options, each with its own advantages and disadvantages, and significant cost differences amongst the bunch Choosing the right shipping method could be the difference in whether your freight arrives on time. Picking the wrong one could mean your shipment never arrives at all.

If your company is evaluating its shipping options, examining each one, as well as some of the pros and cons, is an important step in the decision-making process. The following is a quick guide to a few of the most popular shipping options to aid in your shipping search.

Less than container load (LCL) - LCL is an international ocean freight shipping option that allows a shipper to utilize just a portion of a shipping container, instead of the whole thing. LCL is ideal for companies with a low volume of international shipments or those who need an inexpensive means for transporting cargo. It also allows shippers to quickly move their cargo because they don’t have to wait to fill an entire container. However, with these benefits come a few drawbacks. Most freight companies combined several LCLs to fill containers. This means your product could be at risk of contamination or damage from other cargo in the container. For businesses shipping high value items or food products, LCL might not be the best choice.

Full container load (FCL) – FCL shipping involves transporting using an entire sea freight container. FCL is typically the best way to transport freight – even if you’re only sending a partial shipment – because it allows you to track your goods and avoid the risk of damage or contamination by other cargo. Companies shipping a large quantity of cargo internationally, as well as those who need a little more control over their shipping timetable – and can’t afford airfreight – will benefit from FCL.

Airfreight – Shipping cargo via airfreight is exactly as it sounds. It’s putting your cargo on a plane in order to transport it to its international destination. This option offers the most control and flexibility over the shipping timetable and provides a safer means of transport over ocean freight shipping options. These conveniences come at a price, though. Typically, airfreight is the most expensive shipping option of the three, and may be out of many small and mid-size businesses’ budgets.

You probably can’t personally deliver your cargo to every international client, but you can find an international shipping method and freight forwarder that you can be confident in.

Mawson Global provides support to companies facing the challenging decision of which shipping method is ideal for their business. We work directly with freight forwarders to provide clients with numerous options in each of these shipping categories, as well as sound, reliable advice on the right choices for your business.  If your company needs an international shipping solution that it can count on, Mawson Global can find one that fits the bill.