May 07, 2021

How To Qualify A Contract Manufacturer Or Component Supplier? (Best Practices)

47 minutes

In This Episode...

Sofeast's CEO Renaud Anjoran joins Adrian from the team to explore the best practices importers could follow when sourcing a new contract manufacturer or component supplier in China, or beyond. This includes sourcing options (who to use), the typical sourcing process, if the lowest prices are always best, IP protection, manufacturer types, and CM sourcing tools and steps.

The purpose of this episode is to give you the awareness of risks that await you, suggestions on how to qualify better supplier/CM options, and an understanding of the different types of manufacturers you may encounter and what their expectations may be.

Hopefully, you'll find a CM or supplier who better aligns with your needs.

Show Notes

00:00 - Introducing the episode

00:49 - Who should be doing the sourcing? Is working with a sourcing agent necessary? - Renaud explains the different sourcing options and some of their pros and cons:

01:53 - Commissioned agent.

05:00 - Third-party sourcing agency. (This is the model Sofeast's supply chain management team follows when sourcing suppliers for you).

05:52 - A trading company.

09:07 - Buy direct from a factory yourself.

12:41 - Exploring two typical sourcing process 'templates' that can generally be followed by most buyers.

If you buy standard off-the-shelf products...

If you develop your new product with confidential IP...

After going through a thorough and careful sourcing process you can end up with a preferred supplier and keep one in reserve as a backup factory, too.

20:14 - Is chasing the lowest price the best strategy? - choosing the lowest price comes with risks which we explore here.

26:33 - Tips to protect IP when sourcing manufacturers or suppliers - don't send designs, etc, to 20 potential suppliers, as you are leaking it yourself. Don't assume that your local NDA will protect you in China, it won't.

🤔 Explore further: We spoke before about manufacturing contracts/agreements here.

32:38 - Which of the different types of manufacturers is suitable for you? ODM, OEM, or CM? - Renaud explains each of your manufacturer options:

ODMs

OEMs

Contract Manufacturers, like our own CM subsidiary Agilian Technology

🤔 Explore further: We covered OEMs, ODMs, and CMs in detail in this episode.

41:35 - What kinds of tools and steps might buyers follow when sourcing a CM? - if you develop a new product you need to consider the following tools and steps...

47:11 - Wrapping up