Outsourcing is often viewed as involving the contracting out of a business function - commonly one previously performed in-house - to an external provider.
Simply put, the company ceases to carry out a specific process and shifts it to third party professionals. In the context of globalization and toward specialized global trends, it’s difficult to imagine the modern economy without outsourcing. Look at Apple; a major factory producing the iPhone and iPad is located in Shenzhen (south of China).
Specific of outsourcing in China
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When we are talking about outsourcing in China, we mainly mean production outsourcing.
Why is outsourcing in China more attractive for companies than in other countries? Because of low labor costs and high levels of industrial infrastructure development. If 20 years ago manufacturing was concentrated in Japan, Korea and Taiwan, now the "world factory" is China.
Let's describe some of the features:
- Production in China is economically interesting if Your sales volume is significant enough
- Logistics cost and timing become involved
- Double care about legal support for all steps is needed
- QC. Here nobody cares about it but You. First of all, You need to make detailed study about product samples. If You know how to read You can get much information about manufacturing this way. Secondly, You need to prepare detailed and precise instructions for every important feature of the purchased product, that will help You not be surprised when you are to see the finished product
- Finished products QC before shipment. You can come in person or employ a third party to come. It is important to prepare very clear instruction about the QC procedure. It gives You a solid argument in case of a situation of conflict
- China business etiquette is dramatically different from what You’re probably used to.For example, businessman here will never explain to You the real reason of a shipment delay if he can "loose face" this way
It’s your choice whether to create Your own team and learn about all of these issues or pass this job on to a third party professionals!