Hello again. In the second part on the topic of “Protecting your Business”, I will be discussing other aspects of sourcing from China that should help ensure you reduce the risk of importing problems rather than products. I will look at problems other than production that can delay a delivery and to finish, I’ll answer a question left by a reader on the first post relating to a enquiry on time schedules & complete turnaround time on sourcing a product from China.

1. One step forward, TWO steps back : Checking your products at the end of production is a crucial element in ensuring you have working & suitable goods delivered to your destination. But don’t think that’s the best you can do to protect yourself. A proper QC (Quality Control) process should have at least 3 stages. The first stage should be when the manufacturer of the goods goes to purchase the raw materials to be used to produce your goods. After all, if they are putting in poor materials, your eventually going to get bad products. The only difference is your willing to wait a month so he can produce them, & then you’ll see that their below par.

The second stage of a Q.C process should involve a visit to the manufacturer just before they are midway through production to ensure everything is running smoothly. Here you can nip in the bud any problems that may of arisen since production begun, or solve any problems that may occur in the near future. This is as important as the first stage & more important than the last. Nobody wants to left with thousands of units of a faulty product.

The final stage is checking each product as they are to be loaded onto the container. At this stage you should only be picking out products that have fallen just short of the standards you require. These may have occured as they were moved around the warehouse e.g. dropped & was damaged. It shouldn’t be a time to notice a mistake in the entire line of goods!!! It’s only to ensure that 95% of the goods that are being delivered will be eligible for re-sale once in their destination. Chances are in a line with thousands of units, you can’t Q.C them all and some will pass under your watch. Just make sure the majority are ok.

So what things can actually effect the delivery of your goods? Well apart from problems with production, the other main factor is sea freight. On average it takes 35-40 days to get a container to Ireland. However if they sail into a headwind, it may take an extra few days. Motors can & have failed on these vessels as well although it’s not a common thing. But the main delay that occur in freight is customs. When a container arrives in Ireland, Customs have the right to strip the whole thing if they feel the need. This could delay your container by anything up to 7 days if they don’t have the man power to do it right away. However once a container is cleared through customs it should be with you within 24 hours.

Finally, in relation to Ed Byrne’s question regarding turnaround time on an order, sadly, the answer depends. On what?? Well the product for starters. If it is a fresh mould that has never been produced before it will take longer than one’s that have an existing mould. If the factory already has stock to meet your order, it may be a case of packing the container then shipping it, so overall time could be greatly reduced. But on average, once all the research is done, you can estimate about 65-70 days in total for production & delivery. My best advice is to contact a friend who has imported already or importing company who should be able to give you a good estimation. Thats all for now. Any questions please feel free to leave a comment & I’ll be in touch as soon as I can. Thanks for reading.

“Money grows on the tree of Pateince”

Over the past few decades, a large variety of ways has been established to help protect both ourselves as individuals & our companies. From over priced insurance to delayed legislative procedures, people are creating more and more ways to blame someone else for their mistakes. We seem to have forgotten that the best way to protect yourself is avoidance. Stay away from the danger & you won’t get hurt. But what if your business can’t avoid the danger & has to take the risk? Here are my suggestions to help keep the risk away from your door.

1. Take your time : It may seem as bit obvious, but still we come across clients who expect things from China to come tomorrow. When you initially begin enquiring, you have to remember that you have never dealt with this manufacturer before. You may be a small fish in a big pond and so you may not be treated with full commitment from the manufacturer. However, beware of thinking that if you are a large company, they will look after you fully. This is a misconception alot of people have. If you are a large company, able to take on many containers a month, the Chinese manufacturer will do everything he can to secure your business, including mis-informing about delivery dates & schedules. Not only that, but in order to come close to the dates they may sacrifice on the quality of the products. My advice is: Pick one line from your range. Discuss with manufacturer the other products you will get if they deliver this correctly. When you receive them, examine all & if happy with the quality & turnaround time, order again.

2. Examine Everything: This is key, especially in first orders. You need to look at every aspect of the project. Be sure it passes all the nessecary standards, the materials used to produce are as stated in the contract, a full quality control check is done, all import duties are paid etc.. There are many minor things that can have a knock on effect to something bigger. In most cases, manufacturers in China offer little in ways of refunding for faulty products unless you have a good agent or are a major client to them. Shipping back small quanities are not woth the hassle for either them or you, so safest bet is to ensure that any problems are solved before it leaves China.

3. Seek Good advice: Just because you’ve gone to China to a trade show, does not make you an expert!! Granted your a step ahead of some people, but it’s a small step & not a leap worth talking about too much. Like most companies, the stall’s at these trade shows only show the positive aspects of sourcing in China & never tell a bad story. You will hear whispers of just how easy it is to buy from China & save money, but in reality you could risk losing everything. Talk to a friend who is already importing products from China or seek advice from importing companies. Beware of the “big man” who is broadcasting his ability that he alone went to China & got everything sorted himself. They are taking a risk & whatever problems they occur will most likely be kept to themselves to save their pride.

That’s all for part one. In the next blog I will give more tips on ensuring you receive all the right products & highlighting how, if done correctly, China can open up new & profitable markets for your company. Thanks for reading.

Hello, I’m sorry its been so long since I wrote. Between trade missions in China and keeping tabs n the latest government strategies in both Ireland and China, all my time has been soaked up. But it’s been enlightening. I met a lot of interesting people over the past few weeks and I kept finding myself giving out the same advice over and over. So in light of this, I decided to write a post stating the advantages of using sourcing companies like Tom Conaty International as opposed to an individual sourcing in China himself. I hope you enjoy.

“The entire essence of America is the hope to first make money — then make money with money – then make lots of money with lots of money.â€? Paul Erdman

In a world driven by profits and loss, it is no wonder so many international firms have abandoned home loyalties in favor of foreign investment. Indeed the transfer of foreign firms to Asian countries such as China and India has been nothing short of extraordinary in recent years. Outsourcing however is not a new phenomenon. During the 70’s many companies were already exporting to Mexico, Taiwan and Korea. As the years progressed and these countries developed, companies changed their outsourcing to other regions, the latest major force being China. But will China follow suit of it’s predecessors and eventually be surpassed by another economy? For the foreseeable future, I don’t believe so.

China has become the core investment region over the past 10 years and all evidence suggests that they will only become stronger in every area. So why will China succeed where others have failed? A simple answer is size. China has the capacity and ability to satisfy a wide variety of industries. China can, and most likely will always, be able to provide a cheap source of labor. Over 15 million people annually are looking for jobs in cities in China. With the average wage between €100-€125 per month, cheap labor in China will be around for a few years yet.

Secondly, China is continually investing in technology and developing and educating their workforce. As mentioned in an earlier article, during the 1980’s both the USA and China produced approximately 4,500 PhD students in technology science. 25 years later, the US figures remain the same while the Chinese figure has grown to over 24,000 students. Combining an educated work force and an unskilled workforce in one economy will be the key to China’s continued success. Indeed even a chip engineer/ designer for a technology firm can expect to earn $2000 per month, still massive cost saving then American or European rates. But don’t believe that cheap labor is the only reason for their success. Combining cheap labor with an industrializing economy is the real key as Joan Zheng, Great China Economist for JP Morgan explained. Companies are not investing in China solely to export. They are looking to tap into a growing economy, hence the surge of car manufacturers into China.

Another key to the cheap prices in China is that with the billion dollar foreign investments each year, Chinese manufacturers can now purchase better equipment that increases production and as a result lowers prices. America’s calls for a stronger yuan will only heighten this as it would make the importing of this equipment both cheaper and more widespread with the result of further reductions in price.

China can surpass the timescales previously enjoyed by countries, once in their position, but whether they will sustain it permanentley can never really be said. For the forseeable future though it will remain the worlds main destination for outsourcing. Thanks for reading.

Throughout the year various Trade Shows are held across China that attract many foreign businesses. In recent years, many flourishing Irish companies have made the round trip to China a priority in the relentless search for reducing their costs. And in all honesty my hat does go off to these companies. Taking these initial steps into exploring the manufacturing hot cake that is China, can potentially save a company thousands, if not millions over a long period of time. But the true secret is not to get caught in the trap of thinking that this now guaranties the best price. Let me explain.

Each year, Chinese companies spend thousands in advertising and travel expenses in order to attend these trade shows. In order for these companies to export directly to a customer in Europe or the U.S, they must attain an exporting licence, something which I can tell from experience does not come cheap. Not alone do the company have to finance the nessecary funds to attain the licence, but a whole list of criteria and regulations have to be met in order to pass through the variable barriers. How many barriers?? Well look at it this way. The Shandong province has over 90 million people and is one of the richest regions in China. Only two companies Worldwide have an exporting licence from this provence. Thankfully TCI happen to be one of them.

The point is that these companies exhibiting their products at these trade fairs need to recoup all this money they have spent that put them in that position in the first place. Naturally, they achieve this by increasing the price of their products. Another way, and in truth this is where some problems may occur, is they take on too many customers. As a result, cases occur where deadlines are not met, product quality deteriorates and consumer satisfaction falls along with the confidence in the Chinese market.

Although this may seem an obvious plug for TCI China, don’t consider it this way. Consider it advice that you can choose to use or ignore. Indeed, ask opinions or seek advise off other people in the profession. In the end, I’m confident that going to companies like ours you will save yourself time and hassle. How?

TCI China, still go direct to manufacturers in China, only we go the the manufacturers that can not afford the exporting licence. They do not attend the trade shows. As a result their overheads are greatly reduced and the products they sell are cheaper. In fact many are supplying some of the manufacturers you see at these trade shows. Secondly, since they do not have a large multiple of customers, they have more time to spend ensuring the ones they are producing for are looked after. They have to. If they lose this customer, they may have no-one else, so quality and price are crucial if they are to continue in business. Thirdly, we arrange the delivery of goods to your warehouse or required destination. We deal with freight, import duties, customs etc. After you order, you can concentrate on other areas of your business. TCI offer you more time, one commodity money cannot buy.

So when your in China, please remind yourself to think critically. It is too easy to believe your ahead of the game and accept everything as you see it. If you do proceed with caution and gain the nessecary knowledge however, you will indeed reap the rewards of the long trip to this beautiful country. Thanks for reading.

Phoebe-“Besides I have a perfectly good coat that no innocent animal suffered for.�
Chandler-“No, just some 5 year old Filpino kid, who worked his fingers bloody, for 5 cent an hour!�. (Phoebe’s response to wearing a coat not made from animal fur)

If your looking to increase profits in 2006 and the coming years then no doubt you’ve probably looked into the idea of sourcing your products in China. Since the majority of a companies yearly expense is through the purchase of stock it is only natural that one would seek to eliminate any additional costs in buying these goods. In most cases this is where China would kick in, but for some, the moral issue has prevented them from looking east. But should it?

China’s industrial record leaves a lot to be desired. Many companies such as Nike, and other major textile brands have all felt the wrath of human right groups. These cases cast a shawdow over the manufacturing industry in China with many people unwilling to support companies that treat workers in such a way. But I don’t think these cases should deter you altogether from sourcing here. After all, look at the treatment of the Filipino worker on Irish companies. My point is, is that there are bad apples no matter what country you go to. The important thing is not to let these people ruin the honest work of other people.

I am a realist and won’t pretend for a second that everything is all of a sudden perfect. Nor will I use the argument that if it’s evident in other countries, it should be acceptable in China. My argument is this. If companies such as Nike, Coca-Cola and any other company big or small sourcing in China ensure that they will only use companies which have positive workers rights issues in place, then we can help eliminate this problem. For example, a Chinese company when looking to secure a contract from these companies, will be pushing this side of their business along with the price. Fear needs to be driven into the employer that if any issues surrounding poor working conditions arise, they will instantly lose the contract and be placed on a black book that could be published for all outsourcing companies to see. Hopefully over-time this problem will dissappear from China and all other countries.

It is by no means a flawless plan, merely a suggestion that could help create the solution. If you can think of improvements to this idea or disagree with it, please let me know. Thanks for reading.

In light of the documentary on RTE 2 last night here is an article I wrote a few months back. Interested to hear of any comments people may have

Hello again. In recent weeks I have become fascinated with the Wal-Mart enterprise. The size, pedigree and efficencey of how this organisation runs is beyond belief. It is said that if you took Wal-Mart alone, they would account for up tp $30 billion worth of Chinese exports. If they were taken as a single economy of their own, that would make them the 7th largest destination for chinese exports, ahead of countries like Russia, Canada and Austrailia. 80% of the products sold in Wal-Mart are sourced in China. By December 2003, it had over 21,000 suppliers. The company has one clear policy. On basic products that don’t change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year.

In light of this statement it’s strong relationship with China is understandable. As Gary Gereffi explains “China is the largest exporter to the U.S economy in virtually all consumer categories. Wal-Mart is the leading retailer in the U.S economy in virtually all consumer goods categories. Wal-Mart and China are a joint venture�.

Here is the dilemma we must consider and I’m interested to see where people stand on this. Is this “joint venture� a good or bad thing for the American economy? When America signed up to the WTO, it saw China as a 1.3billion untapped market for U.S goods. But it would be hard for anyone to argue against the fact that China has benefited far more from the agreement in terms of exports. But just how good or bad is this for the American economy?

“People ask, ‘How can it be bad for things to come into the U.S cheaply? How can it be bad to have a bargain at Wal-Mart?’ Sure, it’s held inflation down and it’s great to have bargains,� says Steve Dobbins, C.E.O of Carolina Mills. “But you can’t buy anything if you are not employed. We are shopping ourselves out of jobs.�

Basically what he is saying is that the cost of these cheap prices to Americans is employment. With so much outsourcing going on nowadays to attain these prices, America is losing jobs. Fewer jobs mean less money, less money increases the need to spend wisely, this increases the demand on lower priced goods, which increases the demand on cheaper goods, which increases the need to outsource to get these…… and so the cycle continues. Therefore, is American retailers and customers push for better prices improving competition or killing it? An economy like Ireland with a smaller population can does not rely on manufacturing anymore. Our expertise lies in our educated and skilled workforce. But can America sustain Wal-Marts ambition to continually get cheaper and cheaper goods? We will soon find out. Thanks for reading.

TCI are now actively seeking an individual to head the purchasing section for construction materials from China. Applicants must have a minimum 1 year Senior, International and Purchasing experience. The successful candidade must have expert knowledge of the construction industry in Ireland as well as a good knowledge of contract law and contract drafting. The position will involve both daily liasing with our offices in China, along with visits to manufacturers in China. A proven track record in both buying and selling in the construction industry is compulsory.

If you feel up to the challenge of working for an Internationally established company and seek a career that optimizes your ability, please contact our office at the number below or sent a CV to one of following:

Phone: +353 1 8853919

E-mail CVs to: cathal@tcichina.org

Post CVs to: HR Department,
Tom Conaty International,
Unit 41, Rosemount Business Park.
Ballycoolin, Blanchardstown,
Dublin 15

Those of you, who watched primetime last Monday the 12th of December, will be well aware of the problems associated with the countries leading banking institutions. If Irish consumers weren’t already getting shafted on many day to day items such as petrol, food and entertainment, the banks, where we KEEP our money, decided to cash in on our misfortune. Quite literally, as a previous manager explained that bank managers targeted under pressure customers and picked figures out of their head to add to their statement. My blood boiled as I watched the program unfold.

To give a brief summary on the show, primetime explained how our leading banks, Allied Irish Banks, Bank of Ireland and Permanent TSB all engaged in overcharging customers. How? By simply changing a charge from €450 to €600. Why? Because they were told to by senior officials and knew in most cases they would get away with it. However, some clients realized the scam and were swift in complaining to the manager. Explanations given were “Technical errors� and that the customer would be fully reimbursed. As pointed out by one of the victims of the scam, “you think that the errors would be 50-50�, but unfortunately this is not the case. Similar to Vegas, the house always seemed to win.

So what are the implications of this report on the banking institutions? Banking as we all know is based on confidence. When you deposit €100,000 into an account, they bank does not put that away and keep it for you to access when you need it. It invests the money in other projects in the hope of gaining a higher return and to help pay any interest owed to you. Each bank will have what is called a primary liquidity ratio (a percentage of total investments in the bank that is required for day to day running). This figure is often about 5-10% max. The rest is tied up investment schemes. In effect, banks are gambling with your money.

If for example, everyone who held money in banks came in and asked to withdraw their savings, the whole system would collapse mainly because the banks don’t have the money. If people and I have doubt they already are, develop or find a new way of saving and storing their money, economies are going to be in major trouble. If for example you were offered a 100% guarantee your money is safe and charges are accurate all the time, you’d grab it. Well, I know I would.

So the real question is- Can we trust our banks any longer? Are the foundations underlying the whole banking system beginning to crack? What will be the implications if an alternative is found? Thanks for reading.

Tis the season to be jolly and nobody does jolly better than the Irish nation. Yes, the time of year has come around again where countless companies gather their workforce to celebrate in the major social event of the season…. THE CHRISTMAS PARTY! Many companies come through unscathed from these social events with staff nursing hangover’s the following day the only major problem, but is there a deeper problem associated with this festive fun? In, the long run are Christmas parties more detremental for staff morale than positive? Let me explain.

Unless I’m mistaken, the reason behind staff parties is an opportunity by management to praise staff on a years hard work and thank them for their contribution in helping the company remain afloat for yet another tax season. In effect, its another bonding session between management and staff. But how far should that bond stretch? Is a drinking session really the best way to praise staff for their work, or is it again, further evidence of the drinking culture in this country? I am aware of many companies that have, what is in my opinion, very unsucessful Xmas parties. Firstly, not all the staff attend.Many have children that need babysitting, are too old for a drinking session, problems outside of work, recovering alcoholics, dislike some other staff members so won’t go… the list is so long it’s amazing. So for these people who can’t go,what reward will they see for their hard work during the year? I know some of you are saying “Ah, get them a gift”, but in large companies, management are not aware of who does and does not attend the parties. In smaller organisations, you’d be amazed at the amount of managers that forget/ don’t bother to do so.

There is another problem in giving a gift. Firstly, it seperates staff. He/She got a gift, INSTEAD of going to the party. Do not forget the stigma attached to someone who does not go. Staff can become seperated if they continually miss out on social occasions, and while they may never become outcasts, they can fall outside “the loop”. We all know the scenario. Coffee break the next day, gossip on previou nights events etc.. and somewhere in there, the killer line is delivered, “oh, sorry, you kinda had to be there to understand”.

Also, does management risk losing some authority/ respect off their employees if they are seen stumbling around in a drunken state? I’ve had previos managers talking complete garbage to me and no longer seen them in the same light after that. One manager even slept with an employee. I’m not doubting the managers ability when they were sober, but with drink on them they became prone to doing stupid things. A manager once told me it was essential they drank in order for their staff to relax. And from a staff point of view I do agree. It’s help me be more sociable towards them, but from a managers point of view, they they run a risky game. On one side you need to be friendly, but on the other you need to be authoritive. Can they match?

Staff parties, despite many conceptions, are not compulsory. A company I once worked in gave out bottles of whisky and some extra money to staff at Christmas instead of having a party. I was happy (mainly because I was 13 at the time) and so were other workers. Its almost hassle free and everyone is in the same boat. So my question to you, is should management give out presents instead of having a party. Which would you prefer? Interested in hearing what you think. Thanks for reading.