How to Navigate Contract Manufacturing in China
For some western companies considering overseas production, they may want to open up a permanent factory in the country where they wish to operate. For others, there are many options for short-term factory operations without investing too much time or money into it. These factories can be found easily in China—a country that provides what is needed for this type of business.
Working with an overseas partner can be quite daunting, but there are ways to navigate these situations successfully.
To make this decision easier for you, we will explore the nuances of contracting work out to a Chinese manufacturing company and what you might expect from such an arrangement – whether it’s just for one new product or if you’re considering scaling up your production globally. Let’s dive in!
What is Contract Manufacturing?
Simply put, contracting manufacturing is when one company hires another to build components or parts on their behalf over a specific period and at an agreed-upon price.
This enables a company to start producing its products without having the huge amount of resources or the funds necessary to build and run a factory.
Different Kinds Of Contract Manufacturing In China:
There are many different types of contracting agreements between companies that engage in contract manufacturing in China. These range from simple to complex and can be broken down into 3 main categories:
1. Private Label Manufacturing
Under a private label manufacturing agreement, the contract manufacturer delivers an item to the client’s inventory warehouse or directly to the store for them to sell under their brand.
In this way, the entire private label manufacturing process is outsourced. The client has full control over designing, marketing, and managing other aspects of their business.
2. Individual Component Manufacturing
Component manufacturing is known as a one-time service, which is generally used to refer to producing specific, individual components.
In individual component manufacturing, contract manufacturing is only responsible for producing one component that will eventually become part of a larger, more complicated final product.
For instance, basic components such as lifting bolts can be manufactured in bulk – this lowers costs for the manufacturer because they are produced to the same specifications.
3. End-to-End Manufacturing
End-to-end manufacturing is a process where products go through every stage of production under one roof.
Of course, that’s not to say there are no outside vendors. There are things like raw material sourcing and shipping handled by external companies.
End-to-end manufacturing is more about the process, rather than the materials. It leaves more control for the client company in regards to design, quality control, and other details.
Working With A Quality Contract Manufacturer In China
There are many benefits of working with a contract manufacturing company in China. Here are a few of the best.
1. Reduce Overall Costs
Across almost every industry, businesses cite this as their number one reason for outsourcing production to China.
Outsourcing allows access to existing facilities and trained professionals, saving time and money in the process. You only pay for the final product exactly what you need, which means you can stick to a smaller and more manageable budget.
Although having your factory is a good way to get exactly what you want, outsourcing to contract manufacturing can be a smart try if you are new to this field.
When it comes to contract manufacturing, flexibility is another important factor you should keep in mind when choosing a supplier.
With numerous factories and workers in the manufacturing industry, you can reach out to your manufacturing partner at any time if there are any changes you need to make.
3. Fast Production
When you partner with a reputable Chinese contract manufacturing supplier for your products, you’ll be able to save more time.
Working with an experienced manufacturer means that not only will your products get manufactured quicker, but they’ll also be done well – because the company has invested in its facility over the years to perfect its production process.
They’ll handle every aspect of product development and manufacturing, allowing you to bring them to the marketplace faster so you can generate revenue right away.
When to Choose a Contract Manufacturer
Manufacturing in China has been proven to be an effective and cost-effective way for many Western companies who can’t compete with wages in other countries and regions.
Though contract manufacturing is often a wise choice, it doesn’t necessarily make sense for all businesses. Here are some things to keep in mind before considering it an option for your company.
- Doing due diligence
- Checking qualifications
- Comparing manufacturing capabilities
- Dealing directly with the contract manufacturer rather than a middle-man
- Conduct product quality
Find A Reliable Contract Manufacturer In China
In recent years, as China’s economy has entered a new era, it has transformed from the low-end to the high-end of the manufacturing industry.
There has been such an increase in the number of production plants becoming less labor-intensive and even more quality driven.
Still, choosing a perfect manufacturing company in China may not be easy. So It’s better to work with an established and reputable company that specializes in manufacturing for years.
Now, if you are ready to start making your products in China, try to work with us Shield Works.
Shield Works is a British-owned and managed company in the South China Greater Bay Area. We specialize in product design, prototyping, manufacturing, and product assembly for clients from all over the world.
We attribute our success to the dedication and expertise of our engineering team who is highly qualified and experienced. With over 15,000 projects completed, there is no wonder why we’ve been able to achieve success. Contact us for a no-cost consultation!