After the samples have been approved, the time has come to seal the deal with the chosen factory and order the product. A classic mistake of beginners is to order the total amount that they want to sell at the end. Those who do this expose themselves to financial damage in case there is a manufacturing problem and may find themselves with a considerable amount of defective or unsuitable products for distribution.
So, the right thing to do is to order an experimental relatively small quantity. First, you need to check if there is an MOQ for the order. The factory might try to persuade you to buy a very large quantity either because it wants to sell more or because producing a small quantity is not profitable for it. Once you’ve checked this out, find out if there is a setup cost for the production line or alternatively the cost of producing a proper mold. As we noted in the previous chapter, the supplier usually produces a cheap temporary mold for samples and it does not hold up in bulk production. The fixed template cost can range from hundreds to thousands of dollars, depending on the size of the product and the materials it consists of.
When closing the order, it is very important (!) to pay attention to the shipping and payment terms. If you are considering EXW, remember that the cost of the shipment to the factory’s nearest port, and the cost of shipment to the destination country will be added to that price.
In case the payment conditions are different, you and the supplier must determine who is responsible for the damage to the shipment at any point on the way of the products to the destination country. Determine whether the factory provides you with the necessary documents to transfer the product through customs, and whether it provides insurance on the products while they’re in the container.
Pay attention to the requested currency (Yuan/Dollars).
It is very important not to bargain with the Chinese. Once you try to lower the price, the quality of the product will decline accordingly. Therefore, consider the total costs of the product and shipping so you can calculate the potential profit and leave a margin for errors. Work only with a supplier whose initial bid is acceptable to you and do not hope for a discount later.
Talk to the supplier and set a time for the end of production so you could estimate when the shipment will arrive at the destination port, go through customs and finally get to the distribution warehouse. Make sure you decide on a delivery time that leaves extra time in the event of an unexpected delay. For example, on the Chinese holiday, it is recommended to set the delivery date for a month before the holiday.
Everything we have discussed so far will not be valid if you don’t have a contract. Be sure to record in writing any communication with the supplier and confirm the order of the large quantity only after signing a contract with the supplier.
Write in the contract the terms of what happens if something is not consummated from the side of the supplier (penalties) whether it is financial compensation or a commitment to the production of additional proper products. Write the terms of payment in the contract: the payment currency, the platform through which the transfer will be made, and when each sum will be paid.

Issues related to product quality can also be traced to process problems. The way a company handles its loading and storage processes, in particular, can either make or mar its quality initiatives. Certain aspects of material handling undoubtedly relate to quality, such as preventing product damage. However, quality extends beyond that obvious example to all aspects of the business process. Simply put, a process is a sequence of activities of the accomplishment of a certain work. Quality can be thought of as the degree to which a particular process does what is expected to do (or not do).
It is expected of a material or product handling process to deliver (finally to the customer) the right item, packed based on requirements, undamaged, properly labeled and documented, and at the right time. This is important for customer satisfaction and prevention of loss. Failure to deliver as expected will have the customers dissatisfied. Also, it will often require some cost to make it right while also risking the loss of future business. Even detecting the problem before it gets to the customer still involve some costs for correction.
Some of the problems that may arise from loading and storage process include the following.

• A trailer might be loaded and ready to go; however, the bill of lading isn’t ready yet.
• A leaking roof above the loading area of the plantation, which can result in wet boxes and moldy products.
• Rodents habitating the storage area can lead to holes and tears in the boxes and unprotected broken products.
• The wrong product might be detected at an inventory location with no clue on the location of the right product.
• An “extra” load may be discovered on the dock after loading a trailer even when records have indicated that the product has already loaded.

These problems are process quality issues and are detrimental to business. Imagine the problems your business may likely face if any of these problems occurred. In the process of correcting them, your attention is diverted from your usual work. However, if the problem is ignored, it might create a bigger problem eventually. For instance, if an “extra” load is discovered and the trailer was shipped, the owner of the load might complain which will trigger extra shipping cost or payment delay as the order did not get completed. Ultimately, the consequences of process quality issues might range from financial impacts to an eventual lost business.
To prevent this, understand output requirements for the overall process and also each step in the process; be focused on the prevention of problems, and then ensure that each process step assures the correction and completion of output.
There are two ways to deal with these situations using the services of a third party inspections company. One of  them which Is the  least favorable, is to inspect the products’ packing and loading process in the plant. Although it sounds like a good option, it only detects possible problems regarding a specific shipment, and sometimes it might be after a big batch of products have been packed in a bad manner.
The better option though, Is to preform a factory audit, before starting to work with a specific supplier. Checking it’s packing, storing, and loading processes in advance will ensure you know the regular working methods of the plantation and that the supplier is not trying to tempt you to order more by doing a good job only in the first time you work together.

Would you take up this opportunity in prevention rather than correction?
www.coze.tech for factory audits and inspections

The development of globalization has made offshoring a predominant factor in many large companies such that it is an irreversible trend. Offshoring can increase a company’s domestic employment while also improving the quality of its worker’s skills. Offshoring manufacturing activities in China, for instance, comes with the benefit of low cost of labor and manufacturing. In other words, companies can save money on materials and labor by manufacturing overseas. Even with the lower cost of production, the quality of the product produced through this approach is often better than domestically-obtained one. This has contributed to the annual increase in manufacturing wages in a country like China.
Regarding international business, most companies consider the use of a third party to meet a part of their manufacturing needs. A company who plans to source materials overseas should be aware of the possible challenges that may arise during the process.
The first challenge is the location of choice. Some clients end up signing contracts with some manufacturers in offshore locations without appropriate understanding the risks that are associated with each location: skill availability, geopolitical issues, local labor competition, wage inflation, legal and intellectual property-related issues, attrition or currency fluctuation.
Also, it is possible to end up in the hands of the wrong supplier. For an adequate understanding of a manufacturers capabilities and differentiation, it is essential to evaluate their performance continually over a sustained period and establish an excellent working relationship with them.
Controlling cost overruns may pose a serious challenge. Many companies fail to control cost overruns as a result of their inability to realize anticipated cost benefits. Perceived or anticipated cost overruns is essential as most business cases are not built by a complete assessment of direct and indirect elements contribute to costs but simply by the wage cost arbitrage.
Data security is an essential factor for offshoring. It entails giving access to some classified customer data and information to offshore suppliers or manufacturers, and any fissure in data security could heavily impact both your business and customers.
Another barrier to a successful outsourcing experience is the language and cultural differences. For instance, there may be some language barriers between the country where outsourcing projects are sent and the country outsourcing. These disparities tend to impact on the ability of some offshore teams in fully understanding the nuances of a project and its effective execution.
Though the benefits of offshoring are numerous, they can be overwhelmed by the daunting challenges if not managed appropriately. However, they can be overcome through proper planning and due diligence. You only require to work with a team of professionals who are versed with offshoring. They will help you address each of the challenges one after the other – you will get a good location, the right supplier, effective control of cost overruns, data safety, elimination of language and cultural disparities, among others.