There are well-performing factories in China. More than you think there are. Although with the millions of factories existing in China, those golden factories are rare to be found. Besides, you as a company also need to be interesting for them to work with. Causing many companies and purchasing managers still have to deal with the majority small to medium factories. Most companies that are less well managed. 

When you are that company that doesn’t generally work with these golden factories, you can assume problems and obstacles will rise along the road. Many issues arise due to a lack of performance of the manufacturer, causing problems for your delivery time and profitability. Besides, it takes a lot of time and energy from you as a purchasing manager to be constantly busy with solving problems at factories.

Every order a new problem can arise

In your last production order, you solved a quality issue found during the executions of QC inspection. If you are a purchasing manager, you probably can confirm that sector-wide this doesn’t imply a guarantee that the next order this problem will not arise. Actually, in many cases, the reality shows that the first problem solved would not arise anymore, but in the next order, another problem arises. 

Focusing on finding and negotiation solutions

This causes that many purchasing managers constantly are busy with solving issues. Every new order again. Time and energy are then invested in finding solutions for these problems. Secondly, there is a lot of energy invested in negotiating with the factory about solving these issues. The focus here lays very clear on finding the reason that causes the problem. Mostly leading you to a factory worker’s lack of performance, communicative failures, technical or design issues. Purchasing managers also often tend to shift the responsibility to find the cause of the problem to the manufacturer. Just because it is their responsibility. Taking no awareness of the actual reasons why problems occur. While all problems mostly have the same or similar root cause, which lays deeper than the causes found on the surface.

Change the manufacturer or not?

When constantly issues are found within production, one of the considerations might be that you change to another factory. However, sometimes this is more complicated than it sounds. Sometimes a product contains a lot of custom mouldings made by the factory. In some cases, they hold the ownership or the purchasing company did not make clear agreements about the ownership and collection of the moulds. In other cases, the issues found are not major issues but still costly. Causing the situation that there is an interest still to proceed with a manufacturer. Besides, you will still be depending on small to medium Chinese factories. Will it become better at another factory?

Focus is on the problem, not the root cause

What we often see is that companies focus on solving the direct cause of a single problem. Looking for which person or department was responsible. Mainly not being interested in where it goes wrong deeper in the manufacturer its organization. As most of the issues arising in factories are similar to each other, they mostly have also a similar or same deeper laying root cause. The reason why purchasing managers are constantly faced with new issues is that they focus on the direct cause or responsible person of a single problem but don’t try to solve the root causes within the factory. Understanding the manufacturer’s operations, production line and the working way will obtain knowledge about processes and possible failures in those processes. Understanding the Chinese culture and the key factors in the production that influence the profitability for the company will bring you insights about what key points are that eventually the root cause for many problems that occur.

Within our management of purchasing orders in China, we mostly focus on the root cause instead of the direct cause of a problem. Creating more sustainable production and profitability in the future for you as a purchasing manager. Also, gaining back those time and energy that you loose with solving single issues.

Principles or profit

Some purchasing managers would blame the factory and would say; I am not your company management, why would I need to manage your internal problems? Actually, in a Western model thinking, this is accurate. However, as many entrepreneurs and purchasing managers can confirm, the reality in China is that you can not assume a manufacturer takes this responsibility. Holding yourself to the principle of the Chinese manufacturer needing to take responsibility will not bring you the profits that you need. Managing the root causes of problems in factories will.