For contract manufacturing projects that aim to produce a product, project cost includes the overall works in design, engineering, manufacturing, quality, project management, and supply chain management. Within each of these categories, work can be divided into many sub-sectors with even more specialty tasks that intertwine with each other. Management teams try to put a budget on the project based on their best estimate. However, there are still many gray areas in the details of each task where decisions need to be made based on skills and best known methods (BKM). Without doing so, this is where the Snowflake Effect can be seen.
Global sourcing involves all factors related to helping make a product happen on time, meeting quality standards, and satisfying budget expectations. There are many resources required in order to build a product such as engineering design capability, tier 2 sourcing, project management, material management, and quality control. The challenge is determining how to coordinate these on a global spectrum. Beyond that, a sourcing team is focused on finding the best goods at the least expensive prices. In other words, they look for value. They help manage and alleviate supply chain risk through risk-management and keeping tabs on supplier stability.
Sourcing goes much deeper than just a simple purchasing decision. A good strategic sourcing strategy generally has a few basic components such as category planning, sourcing projects, and supplier performance measurement. The team looks to align these activities with the goals of the company and leverage expenditures with quality suppliers to maximize value.
How many times have you seen a “Made in China” label on a product? Chances are your answer is “a lot”. This product information isn’t just a courtesy to the customer. It’s legally required for products imported into and sold in the U.S. But what actually determines country of origin? What really makes something “made” in China, versus say, “assembled” in China?
The United States’ new tariffs on China, Mexico, Europe, and counter acts from elsewhere around the world have been a concerning topic in the business world. Since companies have built increasingly complex international supply chains, the impact of these tariffs is much broader this time. However, these tariffs can also be used as a competitive advantage. We need to constantly redesign the supply chain ahead of competition to benefit from the impacts.
Continue reading “Minimizing Tariff Impact Through Global Supply Chain Design”
There are a lot of factors that go into determining the cost of making your product. This is why in early conversations with your manufacturer it usually isn’t possible to give you an impromptu, off the top of the head estimate to how much it will cost you to make your product. Of course it’s a valuable and necessary piece of information to know before going forth with manufacturing, but an accurate quote needs to be based off of something—mostly the details relating directly to your product and design.
If you are producing a product, then you are likely aware that there may be certain safety and quality criteria it needs to meet in order to successfully be marketed and sold. In order to officially prove that your product meets the applicable requirements, you will need to submit it to a third party testing lab to gain product certifications.
Continue reading “What You Need to Know About Product Certification Marks”