Manufacturing in Asia: What Companies Need to Know

Pivot International  |   October 18, 2016

Over the past 44 years, my team at Pivot and I have accumulated a great deal of experience with manufacturing. We’ve worked on small prototype runs and large, high-volume runs; consumer and industrial products; electronic manufacturing and mechanical.

We’ve also worked extensively with manufacturers in Asia, specifically Manila and China where our Asian operations are located.

Our clients choose to manufacture in Asia because it can be extremely cost-effective and strategically advantageous. That being said, there are some considerations that any business considering manufacturing in Asia should take into account.

A consistent physical presence with your manufacturer is key to success.

As I previously mentioned, manufacturing in Asia has both strategic and cost-related advantages. Of course, these companies are also thousands of miles away.

Thanks to tools like webcams and video conferencing apps, that distance isn’t nearly as much of an obstacle as it was when we started doing this work. However, it’s still a factor that companies must be prepared to deal with.

One reason that you’ll have to do more than just set up a few visits is that Asian business partnerships are different from those in the West. Here, we have structured systems and processes that keep our products moving along, even if we don’t have much of a personal relationship with those we’re working with.

In Asia, those systems don’t function the same way. Instead of regular business meetings, it’s facetime between business partners that will keep things on track. So if you choose to manufacture in Asia, be prepared to spend a lot of time on the ground.

Communication will be more complex.

I don’t simply mean that you’ll be dealing with non-native English speakers, which you probably will.

Even if your contact at the manufacturing partner you choose speaks English well – and many people who work in this sector in Asia do – miscommunication can still be an issue. Any language consists of more than just words. There are nuances, slang, and cultural context that add richness and meaning to the words we say and how they’re understood.

In China, for example, language is very literal and precise. Compare that to the English that Americans speak, which is full of idioms, figurative language, and slang. Even if both parties understand the words being said, the meaning can come across completely differently to each.

You’ll have to be prepared for this reality as you handle communication between your company and your Asian manufacturing partner. Choose your words carefully, listen closely, and always verify that both sides understand what’s being said and what the next step is.

Ensure that the manufacturer you choose is a good fit for your company and your product.

This is true when you’re choosing any manufacturer, domestic or international. However, it’s much harder to manage a mismatch when they’re located at the other side of the globe.

When you’re looking for a manufacturing partner, pay attention to the products they’ve already produced. Do they have experience with your specific kind of product? Are the companies they’ve worked with satisfied with the partnership? Will they be able to accommodate regulatory requirements, or necessary design modifications?

Another thing to consider is that Asian factories sometimes have higher minimums than domestic factories, so make sure that number won’t become prohibitive for your business.

Asian manufacturing can offer benefits for many companies, provided they’re prepared for the potential difficulties of a long-distance, cross-cultural relationship. Keeping these points in mind will help ensure that relationship is a successful and profitable one.