Outsourcing · Hardware

Advice for manufacturing in China for US Market?

Shaker Rawan Chief Problem Solver & Strategist

June 2nd, 2016

We are evaluating building an ATM in China and deploying it in the US then other markets. 

Am wondering if anyone has advice on how to best manage this process. While my team has worked internationally - including China - manufacturing products through contract manufacturers is new to us. All advice would be welcome. 

Thank you. 

Asutosh Pathak Supply Chain Manager

June 2nd, 2016

Hi Shaker, Depending on the volumes I would suggest you do an RFQ with some of the smaller contract manufacturers such as Gemtek and Benchmark. I could guide you to Foxconn, Flex, Jabil, Calcomp, Pegatron, or Celestica, but they are good only when your volumes reach a minimum base. Ashu

Adam M.B.A. Supply Chain and Strategic Sourcing Consultant President, Strategic Sourcing Dynamics, LLC

June 2nd, 2016

 Hello Shaker,

I suggest you first step back and consider the most appropriate global sourcing strategy.  There should be no automatic assumption that China is the optimal manufacturing location.  I  often discuss Rightshoring  with my clients, calculating total cost of ownership  (TCO), and the overall global sales strategy before determining the global supply chain map.    You may find the trend towards regional manufacturing,  close to your customers, is more suitable.  Here is a web  link to an excellent free total cost of ownership calculator, that takes into account all potential cost factors.  http://www.reshorenow.org/tco-estimator/ Regarding  contract manufacturers, it is important to work through a documented strategic sourcing supplier qualification and selection process.    It is critical to partner  with a contract manufacturer whose core competencies,management culture,  and strategic direction are in alignment.

Joseph Wang Chief Science Officer at Bitquant Research Laboratories

June 5th, 2016

Writing this from Hong Kong.

It depends on what you are doing.  From a manufacturing point of view, an ATM is just a custom PC with a cash box, and there are a large number of manufacturers that do that.  If what you do requires minimal hardware customization, it's a matter of going on Alibaba, finding a few manufacturers that have what you want and then ramping up. 

If you require any sort of hardware customization, then it's a matter of connecting with a sourcing company such as Global Source, Berkeley Sourcing Group, or Radius Development.  They will serve as the interface between you and the manufacturer.  There are other companies that will handle financing and logistics (such as Floship).

If your product is IP heavy then you will have to think through your IP strategy.  If the IP is in the software or in the supply chain, then you can have the manufacturer manufacture the hardware and then you can add the software later.  If there is custom IP in the hardware, then you will have to figure out how to lock that down.  This involves knowing the specifics of the process (and typically the important things involve trademarks and the ownership of the molds).  The strategies for dealing with IP are pretty straightforward, it's just something that you have to think through.

Shaker Rawan Chief Problem Solver & Strategist

June 3rd, 2016

@David - you got it / let's chat if you have time srawan at gmail dot com 

Joel Williams Entrepreneur at EZBadge

June 2nd, 2016

I recommend Rosemary Coates at Blue Silk Consulting. She is the "go-to" person for this: Phone: 408-605-8867 rcoates@bluesilkconsulting.com www.bluesilkconsulting.com my blog: www.rcoates.wordpress.com *Rosemary Coates*, President Author of */42 Rules for Sourcing and Manufacturing in China /*( a Best Seller at Amazon.com) and */Negotiation Blueprinting for Buyers/* and */42 Rules for Superior Field Service/* */__/* and*/_The Reshoring Guidebook_/* and*/_Legal Blacksmith - How to Avoid and Defend Supply Chain Disputes

David Austin Relentless problem solver and innovator.

June 3rd, 2016

Interesting that you're building when mature ATM offerings exist that can most likely be adapted to your needs.  Is there some IP included? If so that should be a critical part of your consideration.