Manila or China? Five Tips for Success in Asia

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Manila or China? Five Tips for Success in Asia

By Mark Dohnalek, CEO, Pivot International - 12/12/2016
Manila is now the center of the fastest-growing economy in Asia, which means in addition to China, manufacturers are starting to move operations and offshore in the Philippines as well. Regardless of which country you choose (or both in some cases), Asia-based manufacturing for the apparel industry can be remarkably cost-effective and strategically smart. 

But for American companies, there is the big distance geographically and the difference in cultures, which creates challenges that need to be uncovered and addressed. When that happens, the long-distance, cross-cultural business relationship can avoid potentially disappointing outcomes for all parties involved.  For more than 44 years, we have done business in Asia and below are five tips for success:

1.  Make sure they have experience in exactly what they are making for you. Another common problem is mistaking "experience" for "experience in your type of product."  You don't want to begin your Asian manufacturing partnership with a mismatch because it will make any other challenge that arises (and there will be many) even more difficult to solve. Make sure the manufacturer you choose has experience making the products you need.  You may think your vision is flawless but changes may be required due to regulation shifts or material limitations may require necessary design modifications.

It is for all of these reasons that it is vital your chosen manufacturer has the talent and the context for manufacturing a product that is as similar to yours as possible. Even if they have the capability to manufacture your product, experience is the real key to success, so do your homework and find out what other products they have manufactured and how satisfied their clients were before settling on a choice.

2.  Make sure they have experience in what they are NOT making for you.  Manufacturing and sourcing issues that can arise overseas are often the same issues that can arise locally.  The difference is that you are here, know the players (and their players), and can move swiftly on decision-making. Not so if it happens in Asia.

The way to solve this is to take potential Asia-based partners through "what if" and "how to" scenarios along with asking for a list of their sub-contractors in every aspect that you may require, from tech to automation to garment to shipping and more.  Find out who they know and have a vendor approval process to work with if their equipment breaks down or they face an unexpected need that they can't manage.  Ask for those company names and their references because if there is a disruption, starting from square one will cause delays in production and deliverables and offset your budget.

Additionally, once you have selected a qualified supplier, it is critical that you have "boots on the ground" presence, as that is truly the only way that you can ensure consistent quality control and delivery performance.  Perhaps through a positive history over time, you can scale some of that investment back, but only after experiencing a consistent performance over a significant period of time.

3.  Have back-up plans for strikes, typhoons and other unforeseen situations. While these events will be out of your control, you can control how you react to them. Be sure to know the damage and disruption a typhoon can cause, from your partner's warehouse to road wash-outs and more.  The same goes for strikes and port-closings.  We may know the obvious such as re-routing from the West Coast to the East Coast, but how to make that happen will take both knowledge and relationships of your Asia partners. In other words, they may know which companies can help with your transportation but are they an approved vendor with them?  Imagine all kinds of scenarios that would be easily solvable if they happened domestically but could be complicated if they occurred overseas.

4.  Be prepared to have your own staff office nearby. A few visits to check-in on your manufacturing partner in Asia will never be enough to set up, launch and continue a solid working relationship. Here's why.  In the West, we are used to structured plans and supply chain processes to stay organized, maintain schedules and keep deliverables moving on time. For example, we have regularly scheduled business meetings to assign and delegate tasks with timelines. But in Asia, it typically takes personal relationships and informal interactions between partners for things to stay on track. Therefore, in order to have a successful experience, a consistent, on-the-ground presence is vital. Maintaining a strong working relationship with Asian-based manufacturers requires a much larger investment of time and resources than most companies anticipate.

5.  Confirm all communication for full accuracy. It's not difficult to find an Asian manufacturer who speaks English, even one who speaks English very well. Because of that, many companies handle their communication with their Asian manufacturing partner in the same way they would an American partner. But they shouldn't, because saying the words and hearing the meaning are two different things. Languages contain many nuances and references that are perfectly clear to a native speaker – but don't always translate the same to a non-native speaker. Take the time to review each party's "next steps" to be sure what was said is what was heard and everyone is on the same page with the same expectations.

By keeping these five points in mind as you begin a relationship with a manufacturer in Asia, you'll have a much better chance of long-term success. From quality to production & delivery schedules to sub-contractor relationships to staff knowledge base, their strategy and approach will make a difference and help your offshore manufacturing program stay on track and succeed.

Mark Dohnalek is president & CEO of Pivot International, which offers global product development, engineering & manufacturing. Kansas-based, Pivot International has Asia operations in both China and Manila.