Tag: sourcing

Are you an African manufacturer or potential buyer of African goods?

Over the past few years, business leaders and investors have become increasingly aware of the vast potential in Africa’s burgeoning consumer market. In addition, most exporters in this emerging continent are salivating at the opportunity to sell their goods to developed countries. According to the WTO, Africa’s exports to the European Union topped €116 billion in 2016. Europe is by far Africa’s largest export market, capturing 35% of its exports, followed by Intra-African trade, China, the USA, and India. With this in mind, the question for African manufacturers and buyers of African goods remains:

How do you ensure the factory management system and product quality align with global standards?

 African countries are rich in resources and capabilities, but a factory’s output is only as good as the factory itself. Where a rising industrial country often struggles is increasing production while at the same time meeting or maintaining global quality standards. Besides, manufacturers often fall short of quality expectations simply because they don’t have the internal knowhow to improve on their own. Other times it’s a lack of capability or understanding of the relevant quality standards, social responsibility expectations, and security systems that apply to their products.

Developed markets such as USA or Europe demand higher quality standards, sustainable and consistent performance, as well as continuous improvement of processes. Being a reliable supplier consists of much more than offering the lowest price in the market, and a sophisticated buyer is not only looking for a suitable range of products on offer. It’s equally essential to deliver a product that meets global quality standards and ensures that production capacity is sufficient or can be quickly and efficiently increased to meet future demand.

Is ISO 9001:2015 enough to fulfill the ever-changing demands of the international market?

 Organizations that invest in meeting global market standards tend to enjoy long-term cooperation with their partners. An investment in this regard could be interpreted as:

• Providing transparency and data related to your quality management processes
• Allowing a thorough evaluation (audit) to identify a corrective action plan, and
• Executing the plan which will result in better products and services for all customers.

Moreover, it will align processes, standards and quality to developed countries or experienced producers like China and ensure the ability to compete with overseas products on quality and production efficiency.

If you are an African manufacturer and looking to enter into international markets, your first step is to ensure compliance. A good litmus test is to ask yourself the following questions:

– Do we have a quality management system in place, such as ISO 9001:2015, in order to enter the international market?

– Do you have sufficient manufacturing capability and capacity required to be a reliable partner?

– Have your manufacturing process and control system been delivering high-quality products consistently over a long period of time?

If you are a buyer looking to purchase or work with an African supplier, your first step is also to ensure that your supplier can comply with all the necessary local compliance. Here are a couple initial questions to ask yourself:

– Does your manufacturing partner use a responsible and ethical supply chain?

– Are there any security issues that may raise alarms to you or your potential customers?

– When was the last time your supplier was audited by a reputable third-party quality assurance company?

Whether you are on the supply side or on the buying side, these questions should be carefully considered. If you need help answering any of the questions above, we, at Pro QC, are always will to have a detailed initial discussion to determine how we can assist.

Pro QC not only supports manufacturers to meet International Quality standards (ISO, IATF, FDA GMP…) but we ensure suppliers establish, maintain or improve their QMS. Our Supplier Development Services team help resolve these challenges for clients and suppliers around the world.

If you are interested in a detailed discussion about any of the quality assurance offerings mentioned in this article, please contact us directly at info@proqc.com or visit our Supplier Management page for more details.

(Article written by John A. Belinga, Business Development Manager) 

Despite recent threats of tariffs related to current immigration issues in the U.S., Mexico remains a solid contender for global organizations looking to mitigate tariffs in China, or simply diversify their supply chain.

According to Inbound Logistics, “Mexico is becoming an increasingly popular option for any and all manufacturing industries that want to mitigate costs without compromising quality.”

As a result, U.S. imports of Mexican goods rose 5.4% in the quarter from the year-earlier period, while imports of Chinese goods were down nearly 15%, according to U.S. Census Bureau data.

Traditionally known for automotive, aerospace and electronics, more recently, manufacturing and assembly of office furniture, stamping and metal mechanics, and textiles (industrial applications) has emerged.

Examples of market movement include:

Companies like China’s Hisense, one of the world’s largest television manufacturers, is bringing more suppliers to Mexico as it aims to switch production of all U.S.-bound flat screen TVs to its largest plant outside of China.

GoPro wants all of its U.S.-bound cameras to be in production in Guadalajara, Mexico, in the second half of the year as it seeks to insulate the firm against possible tariffs.

Cosmetic Colors, a thriving Mexican producer of eyeliners and other cosmetic products, recently got a €7 million ($7.8 million) order from a European cosmetic giant for items that were previously made in China and faced a 25% tariff. The company’s high-end plant in the city of Toluca exports 85% of its products to the U.S. for the world’s top cosmetic brands.

(Source)

The advantages of considering Mexico vs. China include:

• Mexico follows similar Intellectual Protection laws as the U.S. and Canada
• Logistics advantages
• More compatible time zones for U.S. and Canada
• Lower travel costs
• Skilled workforce
• Reasonable labor costs
• Mexico’s exports on average contain about 35% or more U.S. parts, whereas Chinese exports contain far less, at about 4%. (WSJ 6/2/19)

So, why wouldn’t organizations want to manufacture in Mexico?

• Identifying new suppliers can be a slow process. Organizations wanting to quickly hedge tariff implications will likely encounter slower response times in communications.
• In many cases, the costs remain higher than if sourced in China or SE Asia.
• Government regulations, including labor requirements, can be challenging to work through.

Pro QC assists organizations in identifying new suppliers in markets around the world. Within Mexico, Pro QC has an ISO certified testing laboratory in Monterrey and a network of sourcing and quality professionals throughout the country. Contact us for additional information.

 

Additional Resource:

Why Manufacturing Industries are Nearshoring to Mexico

https://www.manufacturingglobal.com/leadership/why-more-manufacturing-industries-are-nearshoring-mexico

 

 

 

A recent blog post caught our attention.

Is breaking up with suppliers easier than we think, even if it’s done “with tact, sensitivity and an appropriate level of empathy?”

Our answer is no. It’s not easy at all.

Is it necessary? Sometimes.

According to the article, little value is placed on the supplier relationship and the assumption is that price rules all.  Is it all about price though… or, cost?

With that logic, an alternate idea is suggested…

Prior to breaking up with the supplier, evaluate how much you’re willing to invest in improving their performance vs. the associated switching costs. Identifying a solid supplier is more than a Google search.  Assuming everything they say on the website is true, it’s still recommended to verify if they exist, if they have that capacity you need, what their current on-time delivery is, what equipment is really on-site, how they’re managing in-house QC, etc. And, the qualification process often identifies investments required for the new supplier to meet expectations. Then, there’s the costs associated with updating logistics, etc. It all adds up and takes longer than people think.

Before switching, consider developing.

Many times, a supplier isn’t meeting expectations because they simply don’t have the resources to improve themselves. They need help.

Organizations that partner with suppliers and assist to provide development resources have a win-win situation. They’re investing less than it would cost to switch suppliers (generally speaking) and the suppliers see an overall improvement that results in better products/service for all customers.

Two examples:

You just scored a big deal with Walmart (or Lowe’s, Home Depot, Dick’s Sporting Goods, etc.) and now have to make sure you’re working with a compliant supplier.

1. You immediately start looking for a new supplier that’s already working with Walmart. How long does that process take? And, how long does the transition take? Will it work within Walmart’s schedule? It usually doesn’t.  And, the cost involved is generally much more than investing in compliance with the existing supplier (assuming no other issues are noted).
2. You need to find out how compliant your existing supplier is. If they haven’t worked with Walmart previously, a gap analysis is helpful. It identifies non-conformaties and estimates the cost involved in obtaining and maintaining what’s required.

You’ve received three late shipments, and your warehouse has identified similar paint issues during the incoming inspections. Rework is required, and you’re facing back orders and returns.

1. You panic and are tired of emailing the supplier and hearing that everything is being taken care of. You can’t risk another shipment with issues and decide to switch. That process won’t be quick, or cheap. And, you’re not guaranteed to have any less issues.
2. You leverage a local quality professional and assess the root cause of the paint issue and shipment delays.  The quality professional identifies corrective actions and then assists the supplier with implementation and ongoing management as required.

As a side note, switching suppliers because you want to diversify or expand your supply base isn’t questioned here. Strategic plans generally make sense and are vetted more thoroughly.

Contact us for help with your suppliers, or for additional information. We have more examples throughout our 35 years of experience to share. We provide solutions in 88 countries.

It’s not uncommon for us to receive calls and emails related to issues organizations are having with expediting orders, either from new or existing suppliers.

By expediting, the assumption is that a delivery date or other expectation has been provided, but is not being met. Reasons for delays in production might include:

• New sub supplier
• Equipment issues
• Key staff turnover or other lack of resources
• Packaging issues
• Larger orders from other clients taking a priority

Whatever the reason(s) might be, communication can quickly become an additional layer of complexity as the supplier continues to assure the buyer that all is well and on schedule.  No fun for anyone involved here.

A quality solutions company, such as Pro QC, can recognize when product quality control might not be the issue.  In some cases, the supplier just needs support to address the root cause issues.

Having a local quality professional assist in expediting adds value:

• Local follow-up can include regular calls and/or on-site visits as required. Accountability is increased. Any potential language and/or cultural issues are addressed.
• On-site evaluation of issues noted can be evaluated. Corrective actions are developed and implemented.
• If the supplier lacks internal resources, a company like Pro QC can allocate internal experts to the team to assist as necessary.
• Weekly reporting (or other frequency as needed) reports progress and provides advance notice of potential delays or new issues. No more surprises.
• Regular calls between the supplier, Pro QC and buyer presents opportunity for discussion of various perspectives and options as necessary or required.
• Professionals on-site are able to evaluate the issues and current situation. A non-biased recommendation can be made to identify new suppliers depending on the conditions or other at the supplier location.

Supplier development solutions are customized depending on needs and the priority of those needs.  Development activities can incorporate a range of services and resources, from product testing to compliance auditing. Whether it’s expediting, inspecting, auditing or testing, an organization with experience and a global presence can find the right mix of resources to address and solve problems. Contact us for additional information.