Pandablog

Why is it that we hear so many stories about the differences between approved production samples and the final bulk product?

I have heard so many excuses over the years blaming raw materials, real large scale production, ambient temperature, extra chemicals, original sample degradation over time, etc. It’s a real minefield and a drag on your resources to be embroiled in an argument about why your final products are nothing like the approved production samples. This is, of course a sign of a factory not in control of their purchasing or production. It is also a sign that you, as the customer are not fully in control too. An approved sample is an agreement between you and the manufacturer that they will produce that item for you in the quantities you require. If there are any changes from either side, it should be mutually agreed upon. There should be more than one approved sample produced so that more than one party can reference it. At least a minimum of one for the manufacturer and one for the buyer should be produced.

It would make sense to have representation at the manufacturing facility prior to the order being sent/delivered to check this sample against the mass produced product to determine any issues and discrepancies before they are shipped. As I have said before, to discover a fault or difference after acceptance of a delivery is often useless to the buyer and effort then needs to be spent on either refunding the items or sending them back. This rarely happens and many SME with substandard product are forced to sell at cheaper price, making a lower margin and releasing a poorer quality brand onto the market.
 
Most manufacturers of course don’t want to make these mistakes but when a purchasing or sales department member gets involved with your product, what might seem like a small change to them (link to cost saving raw materials) could end up being a crucial detail for your brand. You are the owner of your brand and product and you know it better than anyone else. If you have manufacturing documentation, and product specification clearly spelled out, then any deviation in the final product from that is deemed not suitable for you or your brand.
 
To have 3rd party representation on the ground in these facilities at the time of production, comparing your approved samples, checking materials and your product specifications can save you time, money and hassle in the future.
 
For more advice on managing your China sourcing and a free quotation, visit the ETP official website.

Nobody wants the aggravation of moving production facility to a new supplier but your business should always have a backup plan in place. You need to be prepared for every eventuality. Raw material prices, wages and taxes are always on the rise and everyone finds their profits squeezed at some point. If there are manufacturers with better connections, facilities and experience that can alleviate the pressure you are facing in your market then they need to be investigated and considered. Even if you don’t need to make a change at the present, as a research exercise you can feel confident knowing you truly have the best deal.

I recall a client who had completed a lengthy search finding the right manufacturer and finally developing and sourcing a product that ‘worked’ for them, suddenly found themselves under pressure from their retailer to reduce their production costs. They had found the right balance of a good product for a price they were willing to pay. Afterwards, somewhere higher up in the supply chain, a decision was made to reduce the cost of the item to make it more competitive/increase profits in their home markets.

The client carried on as instructed, removing this bit and that bit, adding cheaper materials and cheaper packaging. To no surprise, the first draft of the cheaper product worked out a little more expensive than the current item. This was blamed on rising material costs, labour costs, tax rates, shipping, etc.

The process of reengineering a product put the whole deal back on the table with the manufacturer who used the opportunity to renegotiate their prices. If the client later reverted back to the original product and decide the whole cost cutting exercise was a waste of time, the manufacturer can simply use the excuses made during most recent pricing process to push the cost up of the original product.

As it happens, their original product increased in demand but they didn’t have any in stock to sell because they had decided to stop all production in favour of finding that hallowed “cheaper alternative”. What started as an exercise in saving some money, turned into a loss of profit over their busiest time of year.

It would have made more tactical sense to go to a new manufacturer and ask them to produce a cheaper product using cheaper materials. This way the client would have a cheaper development product in process, while maintaining the option of the superior product at a previously agreed price.

A local and on the ground knowledge of business attitudes and production in China can help your organisation make the right strategic decisions.

For a free, no strings consultation and quotation, visit the ETP official sourcing and quality control China website.