22 Tips for Healthier Offshore Manufacturing Relationships
When the Evangelical Christian Publishers Association (ECPA) hosted its annual Publishing University conference in Chicago in early November, publishers, printers and vendors who attended the “Offshoring” session were provided with tips, advice and a few fair warnings about partnering with offshore manufacturers. Jennifer Butenschoen, director of production at Harvest House Publishers, which publishes Bibles, self-help titles and gift books, presented a 90-minute crash course on the topic, during which she offered tips that Book Business readers should find useful in evaluating their own offshore manufacturing strategy.
More than 100 million Harvest House books have been sold worldwide since the company’s conception in 1974. Now publishing more than 160 titles per year, Harvest House books are sold in 75 languages. Butenschoen joined the company a dozen years ago and has extensive experience in cultivating long-term, successful relationships with foreign manufacturers. Her presentation explored a number of offshore manufacturing considerations, including how to decide what products should be produced where, evaluating whether to use a broker or work factory-direct, effective communication strategies and the dangers of hijacked content.
Deciding Which Products to Produce Where
1. Be informed about the printer’s equipment and its fit with your needs. When evaluating a potential offshore partner, make sure the printer not only possesses the equipment your project will need, but also is adept at using that type of equipment. Plenty of printers are capable of producing a wide variety of projects, but be sure to request samples to ensure that their craftsmanship with that type of equipment is up to your standards.
2. Realize that, in most cases, you get what you pay for. If your quote seems too good to be true, it probably is. “There’s a difference between inexpensive and cheap,” says Butenschoen. To be sure you know the difference, request a variety of samples before awarding any work. Then, upon assigning the work, request that a dummy be made from your specified materials.
3. Don’t assume anything when it comes to quotes. Manufacturing, prep and proofs are usually quoted separately, so be clear that you require a quote that lists each charge separately.
4. Determine additional freight and customs costs. Be clear on your shipping/freight strategy. Your manufacturer can handle these logistics and pass the cost on to you, or you can employ a freight or customs broker. Whatever you decide, always be sure to require a breakdown of all fees.
5. Ask about an export tax. Some countries charge an export tax/fee. Find out whether or not the country you’re doing work in does, and if so, what that cost is, and whether your manufacturer has included it in your quote.
6. Be aware of fluctuating currency. Costs are likely to vary from quote to quote depending on current exchange rates.
Brokers vs. Factory-Direct: Working With a Broker
7. Use a broker that will stand behind the work even when the printer won’t.
8. Use a broker that has an office near the factory. You’re likely to have more success when choosing a broker who not only has a local office, but also maintains an active presence in the factories. Some brokers actually have permanent offices in the factories with which they deal.
9. Understand and leverage the influence of your broker. Although they serve as the “middle man,” brokers provide the added value of having long-term relationships and significant volumes of work at partner factories. Use this to your advantage. A broker may have more influence on cost and schedule flexibility at a factory than a typical publisher would on its own.
Brokers vs. Factory-Direct: Working With a Factory
10. When possible, choose a factory that operates a U.S. office. For communication purposes, including language and time differences, it’s helpful to work through a factory’s U.S. office.
11. Be sure you have a direct contact at the factory.
12. Take advantage of the cost advantage of not having a “middle man.”
13. Always play fair. If a factory tries to do an end-run on your broker to secure your business directly, do the honorable thing and keep your business with the broker. Likewise, if you’ve been introduced to a factory by a broker, don’t bypass that broker in favor of working directly with the factory.
Setting Up an Offshore Partnership
14. Obtain references from trusted sources.
15. Understand the cultural differences in the country where your work is being done. This includes knowing which holidays are celebrated when. Also, strive to understand the culture’s motivation. An example, says Butenschoen, is that Asian cultures typically have a strong sense of honor and family. They will aim to please you and will respond positively to appreciation. She adds that her experiences in India have shown that many factories may strive harder to meet schedule and quality needs when direct representation is available on behalf of the customer. “Putting a face with a name makes a far bigger impact in most cultures than in Western culture,” says Butenschoen.
16. Become familiar with the differences in specification terminology. In China, for example, the term “offset paper” can mean “wood-free paper,” while “cover” might mean “wrap.”
17. Avoid the use of slang and colloquialisms. These simply do not translate in most other cultures. Your partners will take you quite literally, so phrases such as “hit the nail on the head” or “we’re on the same page” will likely be misunderstood.
18. Seek confirmation that your communications have been understood correctly. Repeat what you mean (in an e-mail or over the phone) more than one way, using different words when possible. This can help ensure that you and your partner are clear on what is expected.
19. Research working conditions and make an ethical decision. Workers’ rights are not up to par with Western standards in many countries, so require a copy of your partners’ social accountability statements and, whenever possible, visit the factories in person.
20. Know when your work is being outsourced by your offshore printer. Do your printers outsource your work when their schedules are full? If so, to whom? Be sure you know where your products are being manufactured, and hold your printers and brokers accountable for this work, too.
21. Request a list of certifications. Butenschoen says you can expect reputable offshore printers to meet the same expectations and requirements that their U.S. counterparts do. If the printer is certified by Disney or Hallmark, this is a good indicator of the company’s social accountability and quality control, since these certifications are difficult to obtain. Also, most reputable printers will make their environmental policies available to you.
The Dangers of Hijacked Content
22. Take sensible precautions to prevent hijacking of your content. The printer’s global reputation is at stake, so hijacking of content is unlikely to happen at a reputable printer. Still, there are a number of questions you should ask as precautions:
• Do they monitor who comes and goes from their plant?
• Are the containers that leave their yard sealed, with 24-hour camera surveillance?
• How secure is their facility?
• How do they store your files?
It can also be a good precautionary measure to hire an auditing service to review them.