Who is really to blame for your offshoring failures?

Offshore manufacturing has become the only option for many Australian industries competing in the global economy. But we often hear the horror stories of ventures into offshoring where it has all gone terribly wrong. Poor quality, delivery failures, packaging failures, production items nothing like the sample, the list of potential grievances is extensive. 

We then tend to place blame on the vendor as being either incapable of producing to our specifications, trying to dupe us once they have the contract or simply being incompetent.

So what is really the root cause of our headaches here?

Is offshoring really the road to tarnished reputations and financial disaster?

Or maybe all of this could have been averted with a bit more work. These suppliers are in business doing a similar job for other customers seemingly without the same headaches, so who is really to blame for our failures when other companies have success.

Sorry to say it is time to take a long hard look in the mirror and start to examine what you have done wrong or failed to do in the process of selecting a suitable supplier and getting your products into manufacture offshore.

Sure some suppliers may be incompetent or simply incapable of producing the product as you have specified, the question you should be asking is "How did these incompetent suppliers get through our due diligence process, let alone become the selected supplier of choice to manufacture our products?"

The real failure here is in your selection and auditing process not in the supplier capability. If they truly were incapable of fulfilling your orders, this should have been obvious at the first inspection or first roadblock in your due diligence process and they should have been culled there and then.

Similarly if you have obtained samples that looked great and proceeded to full production only to receive thousands of product failures you have not followed through on the management of your product until it was ready to be manufactured autonomously. The sample is a SALES TOOL for the factory, it is not produced for your benefit so don't fall into this trap. The staff manufacturing your product in volume are typically less senior, on a lower wage and may have been employed recently due to the demand created by your order. They are not senior engineering staff and management dedicated to producing the perfect sample in order to get the contract signed.

This does not mean that the typical floor staff cannot produce your products as specified, it only means you need to work with the factory beyond receiving the first sample in order to receive reliable volume production. You cannot stop and assume all is good once you have seen one sample or you are failing your company in your due diligence once again.

Most other issues come down to lack of specifications, lack of direction given to the factory or lack of communication. Wherever the factory have been forced to make a judgment based on the lack of information provided there is an opportunity for errors to be introduced. 

Offshoring is a necessity in many cases. It does not have to become a disaster, but you need to be aware of the risks and know how to deal with them or prevent them in order to become successful.

 


Brian Le Mon

Principal Consultant at GBOS

Offshore manufacturing has become the only option for many Australian industries competing in the global economy – but thorough preparation is essential. Inconsistent quality and unreliable delivery are just two of the potential hazards awaiting companies that go into this major exercise inadequately prepared. If you’re considering offshore manufacturing, or you’re not satisfied with an existing offshore manufacturing partner, then GBOS can guide you through the minefield.

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