Re-Sourcing Preparation Checklist: De-risking the Relocation of Your Product

Are you ready to move your manufacturing from China to a factory in Mexico (or any other location)? Before you take the leap, there are elements that must be in place to ensure a smooth transition and avoid unnecessary or costly delays in the process. 

To fully understand the importance of getting all your ducks in a row before making the move, consider this hypothetical scenario. 

Company X has been sourcing materials for its product from China for a decade. In that time, various iterations of the product and its components have been made, therefore outdating original documentation. Familiarity with their source in China led to complacency, which resulted in data gaps and outdated specs. It became an “I don’t need to do it because they’ll do it for me,” situation. 

But it wasn’t a problem until, for a variety of reasons, the company made the decision to re-source its manufacturing to a new partner in Mexico. To do so, they must provide all sourcing information and specifications to the new factory. Because the product has evolved since the original documentation was produced, the company no longer has the most up-to-date version of all specifications and drawings on hand. And when they request the files from their source in China, the source claims intellectual property ownership of the updated files and refuses to provide the files to Company X. This becomes a major roadblock, costing them both time and money. 

Now, Company X must reproduce all specifications and drawings in order to provide their new partner in Mexico with all necessary documentation. Unlike China, the vast majority of factories in Mexico will not quote a product without complete and accurate specifications and drawings. Mexico is more of an execution culture and follows exact directions, without assuming any risk or responsibility if the updated design fails at the consumer level.  The executives there are close enough to the United States to see the high level of litigation for product failures. 

And if they do offer a quote, the price will be at least 20 percent higher than if they had final drawings in hand at the time of the quote. When it comes to the speed of getting a product to market, greater accuracy in every step of the process results in both a more competitive and a quicker initial delivery to your distribution point 

For Company X, having every piece of documentation in place, with the most up-to-date drawings and specifications, could literally save them millions in cost and months in time to market.