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.
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.
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.