How Many Factories Should I Consider Sourcing in China?

Most of the time, companies do not source enough contract manufacturers when going through the sourcing process. It highly depends on the industry and product, but sourcing several factories during the initial quotation and qualification process is very important for several reasons.

Market intelligence: To get a firm handle on competitive pricing, the individual in charge of sourcing must look at costing from several manufacturers operating in the industry to dial in what is competitive and what is not. For many products, there is no other way to get an accurate, current picture of the manufacturing landscape.

Supplier intelligence: Often, whether in China or the United States, suppliers will take the exact same design package, CAD drawings, BOM, etc., and come back with very different costs and ideas on the way the product should be manufactured. This presents an opportunity to examine where errors have been made, where greater efficiencies can be pointed out to suppliers, and who is truly providing the lowest costs an the reasons behind it.

Risk: Being single sourced creates risk. The number of problems that can delay your supply chain in China, or any country, are too many to name. If you have already progressed through some steps of the sourcing and qualification with other suppliers, you can connect with them again in a hurry if problems arise with your current vendor. Sourcing and qualifying several suppliers initially helps you manage risk going forward.