Outsourcing in China thoughts, laws and perspectives
An interesting article on outsourcing in China.
The main crux seem to be that one must think in functions, that the question now is not to question "should we outsource", but where, what, how to outsource.
Essentially I think the idea is to think and plan carefully when addressing oursourcing.
This seems systematic, but as a business I think it is important to look at all cost entities, and then decide from there.
Inevitably this is a value chain analysis problem.
Managing you inventories, resources and business processes intelligently rather than going with the herd will take you further. Much much further.
Another interesting article on outsourcing is found here
This article addresses how to protect yourself when you outsource work or processes to China. Legal implications that will matter etc.. Very good reference for a checklist.
In sum,
1) Ensure you have the patents secured in your native country.
2) Register your trademarks or patents in China, this protects your future entry and counterfeiting from China.And most of all it prevents someone from registering YOUR trademark (thereby making it his =))
3) Written agreement to protect your knowhow this should address non-competition, confidentiality issues. This will have to be enforced by contracts, possibly NDAs
4) Don't pay unless you are sure the quality is met. This may require more inspections. You have to take the lead.
5) OEM agreements should be comprehensive. the agreement should address all issues comprehensively, essentially you have to cover all bases.
Please read the original article as it ellicits the notions much better!
Now in writing this short tirade, in another article by the same blog. I find this quote most worthy to take away if you learn nothing else.
"So what is a company to do? First off, THINK. That's right, think. Secondly, do not do anything you would not do in any other country. Just because your Chinese partner and/or your Chinese partner's lawyer tell you this is how things are in China does not mean you have to believe them and it certainly does not mean you have to abandon your common sense.
I am not going to get any more specific in this post because I am convinced that if American companies would follow these two simple admonitions, their sending money into black holes overseas would nearly cease. "
That is the essence of business. Like Buffets says.
Rule no. 1 - Don't lose money
Rule no. 2 - See rule no. 1
As always the devil is in the details.
The main crux seem to be that one must think in functions, that the question now is not to question "should we outsource", but where, what, how to outsource.
Essentially I think the idea is to think and plan carefully when addressing oursourcing.
This seems systematic, but as a business I think it is important to look at all cost entities, and then decide from there.
Inevitably this is a value chain analysis problem.
Managing you inventories, resources and business processes intelligently rather than going with the herd will take you further. Much much further.
Another interesting article on outsourcing is found here
This article addresses how to protect yourself when you outsource work or processes to China. Legal implications that will matter etc.. Very good reference for a checklist.
In sum,
1) Ensure you have the patents secured in your native country.
2) Register your trademarks or patents in China, this protects your future entry and counterfeiting from China.And most of all it prevents someone from registering YOUR trademark (thereby making it his =))
3) Written agreement to protect your knowhow this should address non-competition, confidentiality issues. This will have to be enforced by contracts, possibly NDAs
4) Don't pay unless you are sure the quality is met. This may require more inspections. You have to take the lead.
5) OEM agreements should be comprehensive. the agreement should address all issues comprehensively, essentially you have to cover all bases.
Please read the original article as it ellicits the notions much better!
Now in writing this short tirade, in another article by the same blog. I find this quote most worthy to take away if you learn nothing else.
"So what is a company to do? First off, THINK. That's right, think. Secondly, do not do anything you would not do in any other country. Just because your Chinese partner and/or your Chinese partner's lawyer tell you this is how things are in China does not mean you have to believe them and it certainly does not mean you have to abandon your common sense.
I am not going to get any more specific in this post because I am convinced that if American companies would follow these two simple admonitions, their sending money into black holes overseas would nearly cease. "
That is the essence of business. Like Buffets says.
Rule no. 1 - Don't lose money
Rule no. 2 - See rule no. 1
As always the devil is in the details.
posted by god_is_good478 at 9:36 PM
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