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How to Conquer Chinese Manufacturing

 

 

Western companies face every day the struggles of having a split operation between Head Quarters and a Chinese manufacturing division. Complying with due dates, design specifications, proper storage, and shipping can become a nightmare. Obvious questions just rise when dealing with those situations.  How do you guarantee quality and oversee the process cheaper than by hiring even more staff? How to effectively communicate with the production team? How to save the operation without sacrificing the budget?

Through many years, Incorp China had helped clients to overcome this struggle and here are the three main challenges you need to overcome when trying to conquer Chinese manufacturing.

Communication

Naturally, the factory order changed several times before the final product was agreed upon. In order to get everybody on the same page and organized instead of confused, make sure every detail is translated correctly and in a timely manner. Correct translation doesn’t guarantee accurate engineering though and you need to be sure those instructions are executed properly. Let’s say you’re a flower pots manufacturer. You need your product to be produced according to specific design-details and stored in a specific way and conditions to preserve the integrity of your product. Communicating these instructions during the production process is crucial.

Logistics

A strong plan for logistics is key to success. You need to think about every detail affecting your production and how you can come over with an alternative plan. This particular plan needs to be designed with a wide perspective over your SWAOT’s analysis. Does the location of your production site a key factor in delivery? Are there potential threads due to climate conditions over the year that can affect both the production and delivery? Do you have alternative resources to deal with last-minute struggles? As we can see, logistic is one of the biggest challenges to face and can ruin your operation if you don’t plan it properly.

Paperwork

This is the most underestimated task and this is precisely the reason why is a challenge and it’s also related to logistic. You need to know which clearance and documents you need to have for transport and freight but also need to have a scope on how long you’ll be ready with it. Some products have a live period and getting stuck in your warehouse can end in huge losses for your business. Also, paperwork and documentation can delay your delivery affecting contracts and damage your reputation. As you can see, an eye for detail is indispensable. Risking paperwork not being compliant with China customs is not an option.

Letting us assist you with your business in China means you don’t have to look for multiple contractors to help you with aspects like factory quality control and help with logistics. With Incorp China you get full service in one stop.

Intrigued? Call us or send us an email: +1 (561) 729 6508 / [email protected]

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In China, Guanxi Can Open Many Doors – And Borders

Some life lessons are best conveyed through a story. This one is about never underestimating what power an extensive guanxi holds in China.
Guanxi is the mandarin term for the network, the connection people form privately and in business relation to one another over a long period of time. Other than in Western cultures, China doesn’t differentiate between personal and professional relationships. Upholding one’s ‘face’, one’s reputation, making new connections and maintaining them becomes an omnipresent necessity.
There hasn’t been a single client for whom we didn’t need to make good use of our extensive guanxi network.
offshore, oil, platforms, oil company, drilling, multinational, corporation, business, China, Incorp China,

Offshore oil platforms. Photo: Chad Teer

One particularly interesting case was a logistics project for a multinational oil company we worked on a few years back. Construction parts had to be delivered to an off shore oil platform over night or else the 400 employees working on the platform would have had to be evacuated via helicopter. Six government officials ranging from police over inspection to immigration officers would have to be convinced to keep the border open long past their regular hours to ship the cargo across – and we had only one day to do exactly that.
The negotiations started at the Hong Kong airport with the customs director. He needed to agree to wave the goods through customs clearance prioritizing it to other shipments. While in the Western business world a simple call from an insider might be the correct approach, our CEO personally sat down with the customs director for tea. Slowly guiding the conversation from personal exchange to business affairs our CEO’s excellent knowledge of the Cantonese language helped form common ground and resulted in a successful endeavor.
With the cargo out of the airport ahead of time the next hurdle were the borders. What proved to be problematic were the border’s operating hours between Hong Kong and China preventing the construction parts to be passed through before the deadline. Keeping open a border beyond scheduled times requires, firstly, the border officials of both countries to be in agreement and, secondly, a trail of legal documents permitting such an inconvenience. In wise foresight, Mr. Fisch, our CEO, had already payed the Chinese border commander a visit on his way to Hong Kong. Usually, these types of high-ranking officials would never accept the visit of a foreigner. Mr. Fisch, however, instead of attempting to make an appointment, walked through the government building as if he belonged there, straight into the commander’s office. He immediately started conversing in Mandarin. Stunned by an American speaking fluent Chinese and being this straightforward, the officer invited our CEO to enjoy tea together.
After, again, a very private conversation about their backgrounds, families and commonalities guanxi was established and one could move on to business affairs. The Chinese border commander helped Incorp China not only to acquire the approval of the police, customs and immigration but even agreed to organize a chopper waiting nearby the border to transport the cargo directly from behind the Chinese frontier to the company’s offshore platform.
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Shenzhen FongTin to Hong Kong Bridge. Photo: WiNG

On the Hong Kong side of the border the Hong Kong border commander who made a grand entrance with his two bodyguards greeted our CEO. The initial encounter was rather tense but after tea, good conversation and Mr. Fisch’s ‘renqingwei’ (English interpretation: “human touch/flavor”) he managed to get through to the officer. Since the Hong Kong border commander was seemingly nervous about granting such a great exception, Mr. Fisch called the Chinese border commander to speak to him personally over the phone. With reassuring words the two officers came to an agreement.

It was an achievement comparable to a miracle. Never before had the border been left open without the time consuming effort of preparing the legal documents required. The vital construction parts passed customs, inspection, and the boarder without problems and were delivered on time for the platform to undergo repairs. Our client was able to keep his business in operation and none of the employees had to be evacuated. With no representatives on Chinese ground who could have personally convinced Chinese officials in their native languages to help this company, huge financial losses couldn’t have been prevented. Establishing and maintaining a strong guanxi is vital and simply cannot be done form afar or by someone not in touch with Chinese customs and manners.

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