Custom Manufacturing

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Custom keyring takes Japan by storm

2015 November 26

custom-keyring-russell-hotelThis custom keyring project took us – and our client – by surprise!

The Russell Hotel is a boutique hotel in the heart of the Rocks, Sydney. Quite by chance, it was featured in Episode 12 of a Japanese anime: Free! Eternal Summer.

The series aired in Japan in 2014. In Episode 12, two of the main characters, Rin and Haru, visit Sydney.

It was the first time the anime featured locations outside Japan. It includes beautiful and accurate images of Sydney landmarks. The Harbour Bridge, Bondi Beach and – wait for it – the Russell Hotel!

The two boys check into the Russell Hotel and are given the key to Room 25. It’s a custom keyring – each room at the hotel has its own custom keyring – and the anime shows Rin tossing the key in his hand.

anime-bondi-beach anime-russell-hotel

Gary Quass, Accommodation Manager at the Russell Hotel, says,

‘We have had nonstop fans coming in and photographing the hotel and also staying in the same room as in the animation.’

And the custom keyring?

‘Fans of the show started to buy spare ones we had here.’

The hotel couldn’t keep up with demand.

We were down to our last one and then I found Ilga.’

That’s Ilga of the Hornet Group, of course.  While the original keyrings were hand-crafted one by one in Australia, Ilga was able to find a supplier in China who can deliver in bulk. So now, all the ‘Free! Eternal Summer‘ fans who want a custom keyring like the one in their favourite anime can get one.

An animated film, High Speed! – Free! Starting Days, featuring the same characters, will be released on December 5, 2015. We’re not sure whether the keyring’s featured, but if there’s a sudden surge in demand, Hornet can certainly arrange for more stock!

***

The complete Episode 12 of Free! Eternal Summer is available here. English subtitles. The key comes at around 13 minutes. When Haru and Rin are checking in, you can see all the different custom keyrings for the different rooms on the wall behind the receptionist.

Importing from China – How much do you know?

2015 October 26

importing-from-china-quiz-illustrationAre you a China sourcing expert?

Do you have the knowledge and expertise you need for successful sourcing and importing from China?

  • Can you ensure quality product?
  • On time?
  • Every time?

10 quick questions will help you find out…

Take the China Challenge now!

 

 

 

 

 

Packaging Design for International Sourcing

2015 October 20

packaging-design-crushed-fragile-cartonEven customers who give great product specifications often forget packaging design. Others specify retail packaging, but don’t mention shipping boxes.

This post looks at all levels of packaging for your product.

Why they matter and what you need to address at each level.

Good packaging design needs thought and pre-planning. It may cost a little more. On the other hand, it costs far less than repairing or replacing damaged products.

And for many clients, pre-planning actually saves on repacking costs once goods reach Australia.

Types and Levels of Packaging for your Product

Let’s look at these from the innermost level outwards.

Retail Unit Packaging

This is the final sales packaging for the product. It’s the first packaging most people think of.

Packaging design considerations include:

  • Branding. Logo, tagline, colour, imagery and style are important. So is the packaging material.
  • Promotion. Related to branding, but not the same. Think about special packs for promotional campaigns, like this current Nutrigrain offer.
  • Product protection. Products such as glassware, ceramics and electronics may need internal packaging materials as well as a carton.
  • Ease of stocking. Many fast-moving consumer goods are sold in rectangular cartons. The shape makes it easy to stock shelves. It’s efficient use of space too.
  • Labeling requirements. Regulations vary for different products, but be sure to check requirements in your packaging design.
  • Barcodes. Yours. Your distributors. You may print as part of the packaging, or you may leave a space and apply stickers later.

Inner Cartons

This packaging is one level up from the individual retail unit. If you’re supplying to retailers or wholesalers, it’s the level of packaging you’ll use to deliver to them.

In Hornet’s experience, many clients could improve business results by looking at inner cartons much earlier in the sourcing process.

packaging-design-inner-cartons-outer-cartonsDesign inner cartons to meet your retailer requirements and have goods packed in these cartons in China.

Your unit cost may increase a little. But you save on the expensive process of packing and unpacking your product once it’s imported.

Not only is it less work to do it right first time, in China, you also get the benefit of cheaper labour.

So before you place your next order, talk to your retailers. Then specify inner cartons which satisfy all their requirements.

  • Order quantities. Retailers often have a preferred order configuration – for example, lots of three, or six. If your inner cartons match this configuration, your pick and pack operations in Australia will be much easier.
  • Branding, labeling, barcodes. Your distributors want to make operations easier for their warehouse or store staff.  Find out what their guidelines are and follow them.
  • Remember Occupational Health and Safety. Do your partners have limits on the size or weight of cartons their staff can handle?
  • Carton materials and quality. A common issue here is carton thickness. These cartons are still being handled by warehouse staff in bulk. They need to be able to stand up to this treatment.
  • What about labeling for fragile goods, or markers indicating which way up a carton should be stacked?
  • For some products, the inner carton may double as a retail display unit. This can save a lot of rework and increase sales!
  • Think about what happens when your inner cartons are opened. Remember, warehouse staff have to open hundreds of boxes. They use a knife and they’re in a hurry. An extra layer of cardboard at the top of your inner carton can protect retail packaging boxes inside it.

Outer Cartons

These cartons are your top level shipping carton. They are the units used to pack onto a pallet, or into a shipping container.  They are also known as export cartons.

The key issues for this level of packaging are protection during transport and accurate shipping.

For product protection, there are many aspects to consider.

  • Strength and thickness of cartons. They need to cope with rough handling. They may be dropped or knocked. Bad weather can lead to turbulence during air freight. Container ships roll with big waves, so items may shift even if well packed.
  • Temperature variations. If your product is sensitive to temperature, you need to allow for this. Does it expand or contract? Leave space, but still make sure the product is secure.
  • Humidity. Once a container is packed, there is limited airflow. The air may not be able to hold as much moisture if the temperature drops, so condensation occurs. Include desiccants in your packaging to minimise mould and water-staining from excess humidity.
  • Theft and pilferage. Branding on outer packaging can be a temptation. It doesn’t add any real value. Avoid it.

You do need clear information on your export cartons though. This is often called the ‘shipping mark’.  Usually it includes:

  • Your business name.
  • Product code or other reference numbers.
  • Net weight & gross weight of the carton.
  • Dimensions of the carton.
  • Number of cartons in the consignment (so your cartons might be labeled 1/280, 2/280 etc).
  • Country of destination.
  • Indications if your product is fragile, hazardous or needs to be stacked a particular way up.

packaging-design-shipping-markThe shipping mark can be printed directly onto cartons or attached as a sticky label. It should be waterproof, as cartons may be exposed to rain or other moisture.

Remember cartons are often stacked tightly together, so have the shipping mark on more than one side. (Usually three sides.)

Also consider having the shipping mark in both English and Chinese when shipping from China. So the people handling your shipment understand it!

Additional Export Packaging Options

While most products are packed in cartons, they’re not appropriate for everything.  You may need to use wooden crates or metal drums in some instances. In this case the shipping mark will almost certainly be on a label.

Your export cartons will probably be packed onto a pallet and/or into a container for transportation. Both these options restrict air circulation, so humidity and temperature control become more important. You may need extra measures at this level to protect your product.

Other packaging design considerations

  • Packaging waste is an increasingly important issue.  The Australian Packaging Covenant aims to encourage re-use and recycling of packaging. If you ship to other countries, research regulation before finalising your packaging design.
  • Certain packaging materials may be restricted, or require special treatment. Wood used in crates and pallets is a prime example.
  • Unless you are shipping full containers, the weight and dimensions of your packaging will affect your total freight bill. Light, strong materials and efficient use of space can save you money.

Hornet’s number one packaging advice?

Specify your packaging as carefully as you specify your product. And get it checked as part of your pre-shipment inspection.

For more advice or assistance with your export packaging, just contact us!

China vs India: where should you source and manufacture?

2015 September 24

china-vs-india-flagAnyone sourcing from Asia should be aware of ‘Made in China 2025‘ and the ‘Make in India’ campaign. But to source your product, you need more than government-level campaigns. How do you make the right decision for you? What are the factors in your ‘China vs India’ decision?

Labour Costs

It’s well known that labour costs in China are rising.

Bloomberg reports that the average hourly wage in Indian manufacturing is US$0.92. In China it’s US$3.52.

On labour cost alone, India should beat China every time.  But it’s not that simple.

First up, wages vary dependent on the type of manufacturing.

Compare manufacturing exports of the two countries.

china-vs-india-major-exports

China has a lot of hi-tech manufacturing. This requires more skilled workers. So costs are higher.

Productivity matters, too.  It takes 1.6 times as many worker hours to produce goods in India. So you pay a lower hourly rate, but for more hours.

Adjust for productivity and Chinese labour costs are only around twice those of India.

That’s still significant, of course. But cost of labour isn’t the only factor in the China vs India debate.

Labour Laws and Business Regulatory Environment

‘Simultaneously the most crippling of Indian diseases and the highest of Indian art-forms.’

That’s how Shashi Tharoor describes bureaucracy in ‘The Great Indian Novel‘.

The World Bank’s ‘Ease of Doing Business’ ranking tells the same story. China ranks 90th out of 189 countries. India ranks 142.

To be fair, this ranking is for setting up a business, not sourcing product. But it includes some key factors.

  • Getting credit. This is the only factor where India ranks above China. 36 vs 71.  That’s reflected in payment terms too. A deposit of 30% is standard when sourcing from China, but many Indian suppliers accept a 30 day payment term.
  • Trading across borders. A score of 98 for China vs India at 126. Also, much Indian manufacturing is for the domestic market, whereas many Chinese factories target export markets. (And if you source via Hornet, we”l consider that when selecting a supplier.) So your Chinese supplier is more likely to export, plus the regulation is simpler.
  • Enforcing contracts. China ranks 35 – ahead of the US at 41!  India ranks a shocking 186 out of 189. If anything goes wrong, you don’t want to be dealing with the Indian legal system!

One more thing about Indian regulation. Labour laws and taxes are tougher for companies with over 10 employees. There’s little incentive to expand. So two thirds of manufacturing employees work for companies with 10 or fewer staff.

What does this mean for sourcing from India?

  • Supplier selection is more complex and time-consuming.
  • One supplier may not be able to handle a large volume.
  • Smaller companies often have limited resources and can be less stable.

Companies of under 10 employees exist in China too. But there’s no artificial limit, so the range of company sizes is more balanced. In Hornet’s experience, it’s easy to find the right size supplier for your project.

Infrastructure

china-vs-india-infrastructureChinese government support has also led to good infrastructure.

Transport

Chinese cities and industrialised regions have excellent road networks.  2013 figures show China has 74,000 km of expressways. India has around 600km. The Indian government is investing in infrastructure, but major improvements will take time.

This paper on time efficiency at ports globally confirms that Chinese ports operate at world class efficiency. Indian ports need an extra day on average to process a ship.

Power

In developed countries, we take our power supply for granted. In India, that’s not so.

china-vs-india-powerA 2013 report by the Federation of Indian Chambers of Commerce and Industry details the problem.

  • 5% of firms suffer 21-30 hours per week of power shortage.
  • 21% suffer more than 30 hours per week.
  • 64% feel erratic power supply affects their competitiveness.
  • 61% would pay more for reliable power supply.

In the same year, China State Grid reported that ‘nationwide power supply reliability was up to 99.948%.’

Supply Chain Clusters

Finally, strong supply chains exist in many parts of China. Cities or regions have developed a manufacturing speciality and related businesses cluster close together. Short supply chains mean less material in transit, so less overhead cost. There’s also less risk of delay when demand spikes suddenly.

In conclusion

When Hornet started out a decade or more ago, China was the obvious choice for Asian sourcing. The challenge was quality, not cost. Now the picture is more complex.

Quality manufacturers exist in China. But it’s still inconsistent.  It’s important to audit factories carefully and ensure proper quality control measures. On the other hand, China is no longer the default option for low cost. (Despite the recent devaluation of the yuan!)

At Hornet, we’ve investigated other Asian countries, including India.  We’ve sourced from India. So far, it’s been textiles and clothing. We’ve experienced many of the issues described above. We haven’t opened any offices yet – we worked with carefully selected partners to test the water.  We continue to monitor the Indian market.

In many ways, India in 2015 is like China when we started out. Costs are low, but you need strong quality control. And structural factors like transport and power cannot be controlled. Any international sourcing leadtime should include a buffer. In China, you may need that buffer. In India, you will!

The decision whether to source from China or India depends on your specific project. Ask yourself these questions.

  • What product do you want? In what volume?
  • How much lead-time do you have? What will be the impact of a delay?
  • What’s your quality standard? How much tolerance do you have for variation? (It’s not just precision electronics vs clothing. Quality for luxury retail clothing is not the same as for a give-away t-shirt.)

We hope this article gives a good background on the China vs India sourcing debate. For a detailed discussion of your project, please contact us.

Finding a Factory in China – A Real Life Example

2015 July 28

Many of Hornet’s sourcing projects start with finding a factory in China.  Today we’re sharing a real-life example of how we do that.

finding-a-factory-bamboo-warehouse

Background

The client for this project is working with us to source an apparently straightforward product. Bamboo stakes for gardeners.

Sounds simple, doesn’t it? China, the home of the giant panda and of the bamboo pandas eat.  And all we need are lengths of bamboo cane.  How hard can it be to harvest, trim and ship bamboo from China to Australia?

Challenges

Quality

Our client has a number of quality requirements for the bamboo stakes.

  • Species of bamboo. (There are around 1200 species of bamboo, with different characteristics. Many rot quickly when inserted in the ground, which is clearly not good for bamboo stakes!)
  • Length of the stake.
  • Diameter of the stake.
  • Size of the hollow in the middle of the bamboo.  This is important because it affects the thickness of the bamboo wall, which affects strength.

Import Regulations

Even more important is that bamboo is a plant material.  Import to Australia of any plant materials is heavily regulated.

We consulted our customs broker and the Import Conditions Database to confirm regulations. Search on bamboo and you’ll find not just general requirements, but more detailed ones for certain species and certain uses. We needed to be sure that the bamboo was cut, dried and treated correctly before import.

Finding a factory with experience in bamboo for the Australian market was a key decision factor.

Factory Location

Bamboo factories are located all across China. We needed one with good access to major ports for easy shipping.

Continuity of Supply

Demand for bamboo stakes changes rapidly with the season and the weather. We had to be sure we could get additional product quickly at any time.

Some bamboo factories process only bamboo from their own plantations. Some have a network of suppliers across China.  This gives better reliability, so we added it to our selection checklist.

The process of finding a factory

Initial research

Jack Wen, who heads up the Hornet team in China, researched several dozen factories. Many were eliminated due to poor location, lack of experience exporting to Australia, or uncertain supply.

Jack also checked factory registrations were correct and up-to-date. He looked at the factory size and number of employees. A good fit with the client’s expected volumes means a factory which can handle volume, but where the client’s order is big enough to matter.

After the research, Jack had a shortlist of 5 factories. Now it was time to inspect physically.

Factory Inspection and Audit

The inspection visits helped Jack eliminate two more factories.

One was close to ports, but the actual location was remote and mountainous.  In bad weather, the roads would be impassable.

Another had a very small drying area and warehouse.  This meant it would be less responsive if order volumes changed.

finding-a-factory-bamboo-drying

Client Factory Visit

For this project, the client wanted to visit the factories and conduct final negotiations in person. Our China team organised the visits and Jack accompanied the client. He assisted with translation, plus provided advice and feedback to our client.

Practical benefits of using Hornet

Time saving. Imagine identifying and researching two dozen factories by yourself.  Without a native Chinese speaker who knows where to investigate online. Even just location and registration status would take many hours.

Cost saving. In this case, our client wanted to visit the factories for final negotiation, so they still spent money on a trip to China. But Jack’s previous inspections saved them time and money spent visiting unsuitable factories.
Many of Hornet’s clients don’t visit China at all. We negotiate for them. So they save thousands of dollars in travel.  (They save several days of time as well!)

Improved communication. Having a native speaker who understands the business culture makes communication easier. And since Jack was involved in the project from the start, he understood our client’s needs far better.  That meant he could advise as well as interpret.

Emphasis on quality. The factory shortlist was not decided on price. It focussed on consistent supply of product to meet Australian standards. Unless you know a factory can deliver what you need, there’s no point in discussing costs.

Do you need help finding a factory in China? Contact Hornet and let’s discuss how we can help.

HotelTonight’s Australian Launch – How Hornet Helped

2015 July 3

hoteltonight-surfboard-close-up
‘Plan less. Live more.’

Play more. Relax more. Explore more. Unwind more. Indulge more.

That’s the promise of HotelTonight, a last-minute hotel booking app which has just launched in Australia.

(‘Surf more.’)

HotelTonight may be a hi-tech San Francisco start-up, available only on mobile, but it still understands the importance of real world delivery. And Hornet has been delighted to help out.

The press has focused on some really cool features of the HotelTonight app:

  • you can book a room in just 10 seconds!
  • discounts of up to 50%
  • guaranteed rooms available for every night of the year

Meanwhile, Hornet and the HotelTonight team have been doing all we can to make the delivery live up to the promise.

For them, it’s been about hand-picking top hotels in Sydney and Melbourne for the launch. About publicity. About organising a launch event and other activities to help stand out in the travel market.

For us, it’s been about sourcing a whole range of items to assemble into the HotelTonight ‘spontaneity kit’.

hoteltonight-spontaneity-packThese nifty little bags contain all you need when you make that last-minute decision to stay overnight rather than make the long trek home. Toothbrush, toothpaste, a change of undies. Even a pair of sunnies to hide the bags under your eyes in the morning. Everything in the pack is branded with the HotelTonight logo and the whole idea is to fit in with the company’s spontaneous and fun image.

Fun doesn’t come without any challenges. We needed the first hundred packs ready on a very short lead-time before the Australian launch. Then we had more time to finalise the bulk of the order.

So how did we do it?

In consultation with the HotelTonight team, we decided to split the sourcing.

For the small initial order, we worked with our sister company Xpadite to fulfil locally. We accessed their network to source items and overprint with the HotelTonight logo and slogans. Local sourcing also meant we could meet face-to-face or talk on the phone with no time difference. Samples arrived overnight or even the same day. And there was no risk of international shipping delays to mess up deadlines.

For the rest of the order, we leveraged Hornet’s overseas offices to source more widely and control costs. We used our experience with the initial order to refine specifications and quality checklists too. The separate parts of those orders are all starting to come in now, and we’re happy to say the quality is just fantastic.

It wasn’t just sourcing goods, though. All those things needed to be put together to make HotelTonight spontaneity packs. We did that in our local Australian facilities, where we’re also storing stock until it’s needed.

So who gets the spontaneity packs?

  • Some were sent out to journalists and bloggers as part of a PR campaign around the launch.
  • Some were in evidence at the launch party last Sunday. (Thanks for the invite, Stefan, Meagan and team!
  • Some were at the pop-up hotel suite at the Overseas Passenger Terminal in Sydney.
  • We’re guessing some will be at the next pop-up suite in Melbourne in August – but if you want more details of that, you’ll have to download the app.

hoteltonight-pop-up-suite

And in case you’re wondering, at least one member of the Hornet team has tried HotelTonight in Australia already. Scored a room at $50 less than it would have cost any other way. Had a fantastic time. And true to the HotelTonight motto, it was booked on the spur of the moment.

With fun at work and a great offering like this, HotelTonight is one company Hornet are thrilled to be working with.

hothoteltonight-pop-up-suite-bed

hoteltonight-pop-up-suite-pillow-fight

Australian Import Compliance – Key Points to Consider

2015 May 28

import-complianceCompliance is an important consideration when sourcing internationally and importing to Australia.

There are multiple aspects of compliance.  This article outlines major issues you need to consider.

Hornet Group have a decade of experience sourcing from China.  We’ve project managed everything from automotive to industrial to toys to packaging.  So we have a good idea what we’re talking about.

While import compliance issues are similar for all products, the details vary from category to category.  The information we’re giving here is general.  We can’t and don’t guarantee it’s complete or up-to-date.  Before starting on a sourcing and import project, we recommend you do your own research.  If you work with us, we’re happy to lend our expertise.  But regulatory compliance remains the responsibility of the importer.

Compliance with Import Regulations

Import of certain products into Australia is prohibited.

The list of prohibited imports is surprisingly small.  Suicide devices.  Dangerous breeds of dogs. Stem cells and other products from human embryo clones.  Anything at all from countries where Australia has imposed sanctions.  (Libya, North Korea and other such places.)

Many more products are restricted.

They’re restricted in different ways.  You may need a licence.  Your product may simply need to meet specific standards.  As we said, the devil is in the detail.

Some of these restricted products are exactly what you’d expect.

  • Weapons, explosives and firearms.
  • Chemical and biological agents which can be used as weapons.
  • Drugs and narcotics.
  • Therapeutic substances.

Others may catch you unawares.

  • Substances with human or animal origins.  Important if you’re sourcing leather goods like bags or shoes!
  • Goods bearing the word ANZAC – and advertising materials relating to them.
  • Cigarette lighters
  • Novelty erasers (if they look and smell like food)
  • Some laser pointers
  • Some incandescent lamps

A whole range of other products are fine to import as long as they do not contain excessive levels of heavy metals.  One way to handle these is to include the requirements in the product specification.  Of course you also need strong quality control.  This includes testing samples before committing to an order, and further testing at the pre-shipment inspection.

  • Toys
  • Cosmetics
  • Pencils and paintbrushes
  • Money boxes
  • Ceramics – if they are to be used for food storage, preparation or consumption, but not if they’re for purely decorative purposes.

By now it should be obvious why you need to research import compliance requirements for your specific product!  An excellent place to start is the Australian Customs information page on prohibited and restricted items.

Labelling and Trade Description Requirements

We have written previously about labelling requirements.  These apply to many categories of goods.  Additional requirements apply for some categories like food, medicines, textiles, clothing, shoes and agricultural chemicals.

Labels must include a trade description which is:

  • in English
  • in prominent and legible characters
  • on the main label or brand attached to the goods, in a prominent position and in a way that is as permanent as practicable

The trade description must include the name of the country of origin and a true description of the goods.

This Customs page has more information about labelling and contact details for further enquiries.

Compliance with Australian Standards

Import compliance also means your product must meet any and all applicable Australian Standards.  There are nearly 7,000 of them!  Many apply to processes rather than products, but you do need to sort through them.

For most products, it will be fairly easy to identify which standards apply.  But remember, your product may cut across several categories.

Hornet had an enquiry some time back about importing a ‘food van’.  Essentially a café on wheels.  Let’s take a look at the compliance requirements for that.

  • It’s a vehicle.  There are specific requirements and permits required to import any vehicle into Australia.  There are also Australian standards for road vehicles in general, commercial vehicles and special purpose vehicles.
  • It has inbuilt appliances for cooking, refrigeration and other food preparation.  There are also Australian standards governing electronic appliances.
  • It has water storages and pumping systems. These too are subject to Australian standards.

Of course this an extreme example, but you can see why investigating compliance early in your project is essential.

The best place to start is the Standards Australia website.

* * *

We hope this gives you some insight into the kind of compliance issues you need to consider when sourcing from China or other overseas locations.  If you have further questions, we’re always happy to help, so just contact us.

 

Royal Pram Manufacturers Outsource to China

2015 May 6

pram-manufacture-in-china-surf-aston-martinSilver Cross has been making prams for the British Royal Family since 1895.  That’s when King George VI was a baby.  They made a pram for the current Prince George and we’re expecting they’ll make one for Charlotte too.

And guess what? Silver Cross make most of their prams in China!

Chairman Alan Halsall was impressed by Chinese manufacturing quality when he worked in the toy industry.  When he acquired Silver Cross in 2002, the company was struggling.  Halsall introduced modern management practices.  He also brought a global approach – for supply chain and markets.

The company remains true to its heritage and branding as ‘the Rolls-Royce of prams’.  History – having a good story – is another quality Halsall believes is important for businesses.

We kept the British design, but we manufacture in the best manufacturing countries in the world. And in my opinion, the best manufacturing places are the UK and China,” Halsall said.

Three signature lines are still produced in the UK, but the company now has 90% of pram manufacture in China.  And by the way, that ‘British design’ includes co-operation with Aston Martin!

Even when manufacturing in China, far from their roots in Leeds, UK, Silver Cross are very hands-on.  They have worked with their chosen supplier to raise quality to a standard acceptable for Silver Cross.  This covers all elements of the manufacturing process, including raw material, manufacturing, packaging and labelling.

Key to any cooperation is helping factories understand the importance of quality. We are very insistent that quality has to be at the top. We have quality control teams based at the factories, checking the production lines to make sure products are made as we have instructed,” says Halsall.

It’s great to see someone who shares Hornet’s opinions about the importance of quality.  And about spending time on the ground in China.  Local staff and local presence is a key way we ensure success for our clients.

So will Princess Charlotte Elizabeth Diana have a pram manufactured in China?

It’s possible, but unlikely.  Prince George’s wasn’t.  It was a custom item for a very special baby, as you can see in this video.

Silver Cross haven’t just relocated pram manufacture to China, they are also marketing to the Asian giant – as well as to other countries across the world.  With over 10 million customers in 70 countries, this is one company which has got its manufacturing in China right!

Check out the full range of Silver Cross prams here.  (The Surf Aston Martin we pictured above retails for A$5,999 – but that is top of the range!)

(Source http://www.ecns.cn/business/2015/05-04/163990.shtml)

How Hornet’s warehouse in China can help your business

2015 April 29

warehouse-in-china-hornet-staffAll Hornet’s clients know that we have our own offices in China.  It’s one of the key ways we ensure quality sourcing for everything we handle.  But do you know that we also have our own warehouse in China?  Or perhaps you don’t think that’s relevant to you?

There are three main ways Hornet clients can benefit from our warehouse in China.

1. International distribution from China

Many of our clients sell products not just in Australia but internationally.  It makes no sense to import to Australia, then export them again later.  So we oversee manufacturing and quality control, then we ship some goods to Australia and some to our warehouse in China.

As orders arrive from overseas distributors, we pick, pack and ship direct from China to those countries.  Freight is quicker and cheaper than from Australia.  Warehousing is cheaper than domestic storage too.  So our clients benefit in at least three ways!

They may get a fourth, hidden benefit too.  Combining volume requirements for business in multiple countries means a higher production volume.  It may be possible to cut cost per unit, increasing margin.

Clients use this drop-shipping model for products such as custom packaging, industrial goods and homewares.

Drop-shipping from China is not always best. It works well if you have good international trade volumes.  That generally means bulk shipments to distributors, agents or retailers.  If you’re an online store with only a few overseas sales, there’s generally not much value. The courier costs for drop-shipping are not much different.  Plus, you have to bear the costs of warehousing, and manage stock levels, in two countries. That makes your operations more complex.

If you’re not sure what’s right for you, contact Hornet to discuss your options.

2. Order consolidation in our China warehouse

Some clients ask Hornet to manage production of multiple different products for the Australian market.  These may come from different factories and be ready at different times.  warehouse-in-china-stock-consolidationCombining orders into a single international  shipment can save a lot of money.  It’s most effective when we can use one FCL shipment instead of two or more LCL shipments. (If you don’t know what FCL and LCL mean, find out here.)

The process is simple.  We have completed, quality-approved orders shipped to our warehouse in China, and store them until all shipments are ready.  We then pack everything on one bill of lading to send to Australia.

Order consolidation works best when orders are completed around the same time. It also helps if your deadlines are not too tight.

3. Fulfilment services in our China warehouse

Other clients have complex products, where parts may be sourced from different suppliers and require assembly into one unit.  This could be an industrial item product – say installing lightbulbs in lamps.  Or it could be a retail gift pack.  Imagine a luxury toiletry set, with a branded bag made by one supplier, brushes from a second supplier and soap or lotions from a third.

Chinese labour costs may be rising, but it’s still cheaper to assemble than in Australia.   Recently we worked with a major university to source branded custom manufactured items.  They included a unique gift box together with notebooks, tablet covers, pens and other stationery items.  We assembled everything into student welcome packs in our China warehouse.

Fulfilment and product assembly in China has another potential advantage too.  It can help to protect your intellectual property.  If you’re sourcing a complex product from China, Hornet can use different factories for different parts.  Everything is delivered to our warehouse in China for final assembly.  So no supplier has all the details to copy your product.  Nor do the staff doing assembly.  (Even if they did, they are Hornet employees. We’re an Australian company who don’t manufacture, so there’s minimal risk.)

Where is Hornet’s warehouse in China?

Hornet Group’s warehouse is in Dongguan.  This is convenient to Shenzhen and Huangpu, Port Guangzhou, as well as many production areas.

To find out more about our warehouse in China, please contact Hornet.

Samples from China: why you need them and what to expect

2015 March 26

samples-from-china-industrial-sealsSamples are a standard element in the Hornet Group sourcing process.  Every now and again, a client asks us why we need samples from China factories we use.  Usually the client is up against a deadline – to save time they want to skip samples and go straight to production.  We don’t. Here’s why.

Why do you need samples?

Samples are a key part of managing risk in your sourcing process.

Samples help you get things right before committing to the expense of mass production.

To be clear, sourcing from China doesn’t make the risk of poor quality any higher.  There are many reliable suppliers in China and Hornet pride ourselves on finding them. So you can set the price / quality balance at the right point for your business. The only difference with sourcing internationally is that if something does go wrong, it’s harder to resolve.  There can be language difficulties.  Or time delays.  It’s certainly a lot harder to ‘pop round’ and review something over a coffee!  So it’s more important than ever to reduce risk.

Samples from China help you confirm that communication is clear. They demonstrate that your supplier knows exactly what you want!

samples-from-china-textilesPhotos are not good enough.

A photo can help identify obvious defects, but it’s a starting point, not a full check. A photo can’t test the strength of a cable or string. It can’t identify that there’s no ‘auto-stop’ on the umbrella to stop it turning inside out.

In fact, the recent Internet debate about that dress demonstrated that a photo can’t even confirm the colour is right!

What about sending samples to China?

This may sound surprising the first time you hear it, but sending a sample to China often makes sense.  What about these scenarios?

  • You’re looking for a replacement supplier for a product you sell or use already.  (Either to cut cost or because your supplier is closing down, or for other reasons.)
  • You sell a retro item which is coming back into fashion and want someone to make replicas.
  • You service appliances and need spare parts for machinery which the original manufacturer no longer supports.

In these cases you can send a sample which is exactly what you want. It’s a lot easier for the Chinese factory team to study a sample object than to read a specification in English. Of course it is a great idea to include notes with the sample so that they can understand what the key requirements are from your perspective. On the other hand, over 50% of Hornet’s projects include at least some element of custom manufacture.  In other words, the factory will not be providing something from their standard product range.  They will either be taking a standard product and modifying it, or they will be making something completely new, to your design. In this case, you may not have a sample which is exactly what you want.  But you may have something close to it. For custom products, sample notes are essential. You need to indicate what is required and what should be changed.

Who pays for samples from China?

At a minimum, you will have to pay the costs of shipping samples from China to Australia.  This is the case even for stock items.  If you want a custom item, expect to pay a cost for the sample too.  To understand this, consider the supplier’s perspective. Chinese factories are cost-conscious – because their customers are!  Samples cost valuable time, effort and materials.  This is especially true for custom-made articles.  On many occasions, potential clients ask for samples, yet don’t end up placing an order.  How can the factory cover the costs of those samples?  Also, if they have to ship many samples overseas, the delivery costs can be huge. For the Chinese factory, asking you to pay for samples is a way to confirm that you are truly interested in doing business, not just kicking tyres. All the same, it’s important to keep sample costs as low as possible.  Here’s some advice from Hornet.

  • Try to confirm your specification before you order samples. Every time you change your mind, you incur extra sample cost.
  • There are times when you want to see a sample to decide between different specifications. In this case, get both samples at the same time to save on shipping costs.
  • If you’re working with Hornet, remember we assess samples too, before they even get to you. One advantage of having a team in China is a reduced need to ship samples internationally.

Note that if you send samples to China, you will need to pay those shipping costs too.  But it’s often the best way to get exactly what you want.

How many samples will I need?

samples-from-china-measurementIn most cases, we allow for  2 rounds of samples to get the product that you want. As mentioned above, many of our samples are for custom manufactured items. Samples help uncover gaps in the specification.  Also, a sample may be the first time the client sees the product ‘in real life’ – so there are often things they’d like to change.  Suppliers come up with suggestions of their own too.) Also note that if you are ordering a range of different but related products from one factory, you should budget for samples of all products.  For example, different patterns on baby blankets, or packaging of different sizes or design.

What happens after I’m happy with the samples?

Once you’ve approved the sample, it’s time to proceed to placing an order.  Quality control hasn’t finished, though. Any changes or modifications made during the sampling process need to be captured and added to the checklist for pre-shipment inspection. It’s also helpful to store photos and notes.  The approved sample also needs to be kept in case there are any production issues.  In case of any dispute, it’s helpful to be able to compare the pre-production sample with the finished items.

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Samples may feel like a lot of work, but they’re vital to managing quality and preventing far more serious work and rework.  So whatever you do, don’t skimp on the samples!