Outsourcing injection molding from China

It is typical for a perceived opportunity to meet with the following reaction in China. Additionally, you consider outsourcing injection molding to be worth considering given the market potential.

So, you go on a trade mission to China; you attend an injection molding exhibition in one of the largest cities that has been subsidised by the government.

As a result of what you saw and heard at the exhibition, you exchanged dozens of business cards with Chinese executives .

And you provided information regarding supply quotations to those companies which you believed were of interest.

Returning to your base of operations, you subsequently examine the quotations you have received.

Typically, you will make a financial decision based on the product’s cost and request a sample or trial batch of products.

1

When you receive the sample or prototype injection molding products, they rival anything you could produce Acrylic injection molding on your own; and it is difficult to believe they are doing all this for the price they are (in some cases, they are not doing all this, since the samples were not from them).

It appears that you are now hooked, and you cannot get yourself to stop. You  start phasing out part of the supply facilities to China and ramping up the Chinese operation.

As a result of the cost-down approach, you are confident that you can re-enter the market.

Currently, you are assuming that the positive experience that you have gained from the trial injection molding sample will be able to be translated into the full production volume.

You may now experience (very common) issues in quality or service as you scale the volume.

2

If you are not able to comply with the needs of your customers, even if you are saving costs, they are of little use.

Unfortunately, as is the case in many cases, you find that you are facing serious problems because your domestic injection molding supply sources have been exhausted (internal or external).

Additionally, you have not yet established your personal relationships (“guanxi”).

It is so important to doing business in the Chinese way, and the issue is occurring thousands of miles away.

An alternative to the current model can be found. An effective market research strategy starts with careful analysis and assessment of markets, products, ABS injection molding suppliers, and customers.

The majority of companies that have had success operating in China have a similar approach to operating in the country.
(i) they partner with a company of Asian origin (in particular, a Hong Kong-based firm) or else
(ii) they learn how to establish long-lasting relationships with the best Chinese counterparts.

3

It may surprise you to learn that getting started with outsourcing injection molding to or from China poses much bigger challenges than simply product or process issues, but a host of cultural, legal or operational issues.

In the course of this process, delays, costs, and problems which were not expected arise. Taking one at a time, let’s examine these features as they arise.

As a result of this difference, we can identify that it is more a case of the norms being collectivist than their being individualistic in nature.

In regards to the importance of consensus in the region, Westerners may mistakenly believe that it leads to indecision and bureaucracy, among other things.

4

An inexperienced high-flying middle manager entrusted with this polycarbonate injection molding task would just not be able to handle it- especially at this crucial time. There is an issue of “face” that is at the heart of this matter.

A common example of this is the avoidance of embarrassment in interpersonal dealings.

That could lead to loss of a perceived “face” .If your Chinese counterpart were to appear inferior based on their rank, professional status, or knowledge.

Fundamentally – and most importantly – the challenge is to build relationships on a very personal level.

If you can establish a personal connection, we can progress to discussion of the product and the process, and ultimately conclude a transaction.

It is imperative that careful advice and preparation coming with respect to the legal aspect of the project. Chinese law is not closely related to Western concepts.

5

Chinese business at all levels are only now learning Western management and legal concepts.Their utmost ability to absorb them varies across industries.

However, China’s coastal cities (like Shanghai and Shenzen) are exhibiting remarkably rapid rate of change.

On the operational level, China respects hierarchy in every aspect . This is in no way contradictory to what I have already said about the collective nature of society generally.

We have become used to being able to delegate authority at ever-increasing levels in the West, whereas in Asia it is full of the most senior officials.

6

Among the Chinese, teamworking has been a longstanding idea. But the concept of the team leader  embed in it as well.

Leaders in China are not resentful of authority or leadership .

In fact, to be an effective leader, one  needs to follow some basic rules.

This is often a confusing element of the transition from Western to Chinese business and organizational culture for Western executives .

They have now damaged managerial political correctness as well as being familar with a “directive” style of management.