Managing your projects in China: On-time and on-budget
Updated: Aug 6, 2019
Managing heavy industry manufacturing projects in China is more complex than many anticipate. The truth is a significant proportion of clients do not contact us until major issues arise, after supply and manufacturing contracts have signed, manufacturing commenced, and relationships have been strained.
The source of most problems come from the vast differences in management styles and cultural behaviours. These problems distract the project manager and their time is devoted entirely to facilitating meetings and discussions with all levels from senior management through workshop operators to remedy on-going problems. The reactive management style adopted due to these distractions adds pressure resulting in quality issues, delays and cost-overruns. However, with strategic planning, execution and a strong onsite relationship, projects can run smoothly. At manuFACT we have years of experience, local expertise and a simple yet adaptable process in place for ensuring our clients projects in China are on-time and on-budget.
The process is divided into two (2) key phases; pre-contract and post-contract.
Pre-contract is by far the most important phase in ensuring stable manufacturing and project success. Managing this phase effectively can save significant time and money during manufacture. This is the time when you can pro-actively identify potential issues and put processes in place to ensure they do not affect your project. The Post-contract is where you use the strategy and processes developed pre-contract to ensure non-compliances are captured, documented, communicated to all relevant stakeholders and rectified. Remember the goal is to ensure the product meets all contractual obligations and if you don’t have a process for this your project may fail.
Our system follows these five (5) key processes:
Specify– make sure you have documented all relevant design and manufacturing standards, specifications and regional/state/national regulations to cover all aspects of the project. It is critical that the manufacturer understands these requirements and can demonstrate compliance. Just putting it in a document pack or contract will not guarantee these requirements will be met.
Analyse– run this process like any other manufacturing tender, ensure all applicable details are described in your tender pack including; commercial terms, design criteria, manufacture standards, packing requirements, logistics arrangements, warranty and aftermarket support. The second and most important part involves carrying out due diligence and onsite auditing tasks to identify if this manufacturer will be a good fit for your company and they capable of meeting all product and contractual requirements. This is difficult due to numerous factors which including language (both verbal and written) as well as you will be dealing with an international sales department who are not from a technical background but employed for their english speaking ability. It is critical that all details are documented, communicated, understood and agreed upon prior to contract signing.
Measure – During the analyse process, due diligence activities will have identified a large number of actual and potential issues and non-conformances that can de-rail your project. Strategies and systems should be defined, communicated, agreed and implemented to overcome these obstacles. Continuing to measure the effectiveness of these systems to ensure QA and QC activities remain both efficient and effective. Measuring quality against the product requirements is necessary to ensure your product will meet its lifecycle expectations. Not investing time and effort here is at best passing the quality issues to your product maintenance teams and will cost you significantly in both labour and downtime in the future. As well as in-process inspections it is also important to carry out pre-shipping inspection. You don’t want to find that critical parts are missing when the ship arrives and equally want to ensure your product and it’s packing will comply with your home countries quarantine inspection requirements. Products sitting at ports in China tend to attract all kinds of rubbish, plant and animal life.
Improve – During the measuring process you will accumulate significant amounts of data. Regularly analysing this data will allow you to identify trends and ensure you can take a targeted approach to identifying and fixing the root cause of issues, ensuring they do not reoccur during the project. This data should also be well compiled and easily searchable and may help your maintenance teams in the future if the product begins to have operational issues.
Approve – Ensuring that all non-compliances have been rectified prior to departure from the port in China will make your commissioning teams life easier once you take possession of your products in your home country. If issues are still un-resolved when you take possession you may find that your project will have lost priority with the manufacturer and you have a product that can’t be commissioned and put in to operations until they are solved and manufacturing issues reworked.
If your company is looking to begin manufacturing in China, purchasing heavy industry assets or sourcing fabricated steel and building products across the mining, rail and construction industries, give the team at manufactconsulting.com a call or drop us an email to discuss your requirements.
Your on the ground resource for procurement and manufacturing in China.