Saturday 16 May 2015

Kiosk Manufacturing in China

As acting CEO of KT Group now for 10 years i have had many years to visit and gain an insightful experience into manufacturing in China,  in that time we have learned many valuable lesson on the dos and donts when collaborating with our partners and employees of KT Group that has risen to success of our company were many others have closed shop or decided to regroup and go back to domestic manufacturing.

In this short guide i shall like to share some of my experiences and stories with China,  the industrial heartland for kiosk manufacturing is still Guangzhou and especially Shenzhen although in past couple of years municipality is driving cost of living in every aspect higher each year so several plants and established firms are moving outside of city center due to cost of sqm has become unsustainable for them and i believe this will continue.

1. RESPECT IS EARNED NOT GIVEN - as saying we all know is important to consider when you work within China,  the Chinese are extremely hard working people but i have seen to many foreign companies come to China expectations high leaving demoralised they didnt achieve their target.  In many cases it is that you have to build a long term partnership the factory bosses in most cases you will not even meet in first instances when you arrive but in time they will become interested. 

2. SCHEDULES - a common issue that my firm faces is delivery timing,  most clients and i believe it is common for most industrial manufacturing sectors come unprepared or expect to have deadlines meet we in United States and Europe are very punctual as people and we expect others to be.  Be wary China work on their own schedules and no matter how tight your written contract or pledge of agreement is there is little than can be done if you the client push a Chinese supplier to agree to an unrealistic date.  I have tried first hand and the answer is always YES they will promptly agree to most schedules if pushed on this point when agreeing to schedules but reality is those schedule clashes can be avoided if a lesson is kept that if the counter person says in so many words they will try their best it most likely will not happen.  Word NO in china is not a common word there expressions and long winded excuses are their way for stating the fact.

3. QUALITY CONTROL QC is one of those matters that many will see differently but especially European and American clients expect the best,  we all love our iphones or other devices that are most likely manufactured in China.   The truth is that buyers who work in China have to invest time to seek out those institutions that can earn our respect for quality and assurances of build quality in my own experience is somewhat mixed i have myself tried too many firms i care to remember and had several sleepless nights were i have had to take matters in my own hands to resolve issues of quality finishes and lost many tens of dollars over past 10 years due to that but with time i have sourced invaluable manufacturing institutions and having built our relations we have for past few years enjoyed a period of excellence.

 4. VISITING CHINA Back when i began first experimenting to work in China i did so from comfort of my office desk,  thinking emailing and phone calls would suffice to ensure that i would receive my product timely and to quality i expect as a customer.  NO NO NO is short answer to that you may as well stop their and then if this is your intention the fact is that like any supply - customer business relationship being onsite cannot be replaced it is a must and especially if your working with machines that are built on demand and not a off shelf solution.   in end i became a frequent traveler to China and if anything i earned many bonus airmiles.

5. NEGOTIATION OF PRICES Pricing is one of the core reasons why people goto China to try their luck in manufacturing, it certainly was a key arguement for KT Group when we searched for someone who could manufacture our kiosk terminals.  Now again as stated before the prices China offer work with years you have been at the factory,  it is common sense the more you spend the better your able to source that competitive edge your firm is hunting and in beginning you cannot expect the supplier to drop their prices potentially to the level you want.  The other element of pricing is quality their is only so much discount the factory will be willing to give for specified specification and invariable the purchasing department at factory will be swapping high quality will inferior product in most cases simply that is way the factory can earn a balance towards covering its discounts.  Example if a factory say have a common denominator in using fans in all their products they will have sourced a supplier who can provide them with a yearly need here then they will take your required high grade fan and swap it with a low level fan of quality and potentially save 3 - 4 dollars per item and then if you multiple that by say 10,000 yearly machines they may push out then saving can be difference that is enormous.

6. TO GOOD TO BE TRUE i was brought up by my parents to always be wary of pranksters who offer something which sounds to good to be true,  and it was a lesson that when i began working in China was an important point to remind oneself.  In very early days at KT we were approached by a company who offered us extremely low pricing and we pounced on this opportunity as a hungry lioness thinking that it was our little secret weapon.  I remember that one of our first projects was to deliver 60 terminals to Kuwait and we decided to contact the factory who had offered us this incredibly low price in end result was we had to rework all kiosks at another location and it ended costing us all our profits and nearly our reputation.  Kindly reminder is that price is important but this is least important if quality, timing and workmanship are not up to scratch.

KT Group established ourselves in China with our own office and local staff,  the solution that worked for us was to have full control 24x7 at our preferred point of manufacturing and this has resulted in that our two primary metal production facilities and KT have grown to mutually benefit each other our orders are sizable today compared to 5 years ago and we have the infrastructure to support mass production both in procurement of parts which at KT we have our own purchasing department,  we also have staff onsite each day to ensure we continuously track production at each and every stage of the manufacturing process from starting at engineering drawings and right to the point of packaging and shipment.