Even the smallest miscommunication with a China supplier can result in unexpected and undesirable situations.
“Mistakes can happen for a variety of reasons including, poor communication internally in the factory, lack of clarity on original request or human error,” said Jacob Yount of JLmade, who has been sourcing in China since 2003.
“Assuming anything in China manufacturing is the first step to a disaster,” he added.
Here are four real-life examples of how things can go wrong when the supplier misunderstands instructions or the buyer does not list their requirements clearly.
Aside from explaining what caused the miscommunication, we asked each company to describe what they learnt from the incidents, and the steps they took to avoid such situations in the future.
Company name: Beretica
Main import market(s): UK, US
Sourcing in China since: 2007
Company website: www.beretica.com
We instructed our supplier not to use any kind of staples on the packaging and carton; it must be metal-free (as a safety standard of our customer). The supplier agreed with this easy instruction, and our QC team also mentioned it in face-to-face meetings with factory executives.
This instruction was written on the purchase order and the pro forma invoice. It looked like everything was clear. But at the final inspection, we surprisingly found that there were even more staples on the cartons than usual, they used these extra staples for more secure packaging.
We lost two days for shipment due to repackaging.
It was the peak season for the factory. Among many orders, the production department misunderstood this very easy instruction coming from the sales department of the factory.
They guessed we wanted more solid and secure packaging than the standard. Besides the sales person did not control the production himself in terms of requirements we instructed.
Avoid placing orders during the peak season.
We understand that QA is much more important than QC. Therefore we built a team for QC including Chinese employees, because native Chinese personnel might be more useful in our China sourcing team to prevent more complex misunderstandings in the future.
Company name: JLmade
Main import market(s): US
Sourcing in China since: 2003
Blog URL: http://jacobyount.com
My first year working in Nanjing, China, for another company, back in 2001, I was working on a project of plush toys that had a serial number on the tag. I emailed the serial number to the factory. They faxed back the serial number for me to check. I glanced at it without checking it letter by letter, number by number, assuming it was the same; because, why would the factory change it?
Sure enough, there was one discrepancy in what they sent back to me and the incorrect serial number was then printed on 40,000 plush toys.
I don’t have a clue why the factory changed the code and then asked me to check. It was like they were setting me up for failure.
I realize now, many Chinese factories leave the responsibility of exactness not with themselves but with the client or importer.
But the main cause of the error was that I was young and inexperienced. At that time, I had been in China for only approximately three months and it was my first sourcing. I didn’t know a factory would change things for whatever reason and then ask you if it is correct. It is kind of like playing “hide-and-seek”.
With China you have to learn to micro-manage your orders in a “macro” sort of way.
That was my wake up call, 12 years ago, to learn that everything the factory sends, has to be checked line-by-line, number-by-number, image-by-image. They will change things without any sound reason.
I’ve seen this happen a multitude of times later on but thankfully, we have learned that whatever can be changed will be changed and it takes all the more control.
This includes products’ color, material, size, the print…for whatever reason, whether poor communication internally in the factory, lack of clarity on original request or human error, the importer has to double-check everything.
Assuming anything in China manufacturing is the first step to a disaster.
Company name: procurAsia (the company in this case study is now a client of procurAsia, but was not managing this project through the company at that time of the events)
Main import market(s): Western Europe
Sourcing in China since: 2013
Company website: www.procurasia.com
A European company was looking for mechanical and electrical parts to be assembled into wind turbines in Europe. They found one reliable supplier of parts and defined the right part with them. The part was based on one of the supplier’s standard product, with a few additional machining.
After discussion, the European company purchased a first product for tests. The purchase order was sent out, with drawings and additional technical information. The down payment was made, and the supplier started production and announced its lead time.
At that time, the European company planned a pre-shipment inspection to ensure that the product was in line with requirements, especially the specific additional machining.
At the time the goods were planned to be ready, we took contact with the supplier to arrange the pre-shipment inspection.
“Hi, the goods have been shipped a few weeks ago. We were not informed about that before we shipped out the goods. Thanks and Best Regards.”
The goods were shipped before pre-shipment inspection.
We had several rounds of discussions with the supplier and we are convinced that they shipped the goods in good faith.
At the same time, the European company was convinced that they had clearly requested a pre-shipment inspection in their purchase order. And since it was in the purchase order, there was no need to do anything more.
We checked and the inspection was listed in the purchase order (see below). But the problem most probably comes from the acronym “FAT”, which means Factory Acceptance Test.
“Delivery: FOB Delivery notice to be sent 15 days in advance before shipping
Quality and test procedures as per requirements attached
FAT to take place in your facilities before shipment.
According to XXX general purchase Terms and Conditions
Payment terms: 20% advance payment - 80% before shipping and after FAT.”
We believe that the supplier did not identify this as a pre-shipment inspection and then forgot about it.
Technically, the buyer could refuse to pay for the balance payment, but this would have led to nothing constructive
It is important to reconfirm the terms of the purchase order with the supplier and to go over the practical implementation.
In this case, specifically reconfirm with the supplier which steps will be undertaken and a few weeks prior to the scheduled goods availability, contact them again and organize the inspection.
Company name: Sofeast Ltd
Main import market(s): Europe
Sourcing in China since: 2006
Company website: www.sofeast.com
Together with the marks to be printed on the carton, the supplier even printed the printing instructions that were sent by us on the carton.
Here are the importer’s requirements (confidential information blurred):
Here is what the supplier printed on cartons:
The supplier sent the requirement directly to the carton manufacturer, who did not have English-speaking staff.
Make the instructions stand out in a different format. And ask for photos of the cartons as soon as they are delivered to the factory, to catch problems early.