Contract Manufacturing in Asia Checklist – Part II

Last week we laid out the top ten things to assess when identifying a contract manufacturer in Asia.  As a part of your brand’s due diligence checklist these are vital when assessing the long term viability of a factory or supplier.  This week we wrap up with some final bullet points to include in your factory vetting.

11. Contractual Agreements: Have a comprehensive contract in place that outlines terms, responsibilities, quality standards, and dispute resolution mechanisms. It should also include confidentiality clauses.
12. Quality Assurance Visits: Plan periodic visits to the factory to inspect production and ensure quality standards are maintained.
13. Emergency Plans: Discuss contingency plans for unexpected disruptions, such as natural disasters or supply chain interruptions.
14. Regulatory Compliance: Ensure the factory complies with all relevant regulations and standards applicable to your product.
15. Payment Terms: Clarify payment terms and schedules. Be wary of large upfront payments; consider payment milestones based on production stages.
16. Exit Strategy: Include provisions for ending the contract gracefully if needed, without significant legal or financial repercussions.
17. Long-Term Relationship: Consider whether the factory is a suitable long-term partner for your brand’s growth and innovation.

By thoroughly assessing these factors and maintaining a strong partnership with your chosen factory, you can enhance the chances of successful contract manufacturing for your brand’s product. Having a qualified resource to help administer a successful program is essential.  There are several Asia manufacturing consultants who can shepherd you through the process including arranging factory visits, negotiating terms and ensuring your design, materials and specifications are met.

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