Trade wars and moving furniture production to Vietnam.

 

While President Trump continues his trade war with China. The back and forth tweets and headlines are volatile. Today the low-level Chinese delegation due to visit some USA agriculture suppliers cut short their visit and returned to China. See here: http://xhnewsapi.zhongguowangshi.com/share/news?id=351561019723776

 

If you have been keeping up with trade war events you will know this is a wider and more complicated issue then simply the trade balance. The USA is also addressing the possibility of IP theft and security issues, see here:  https://www.theguardian.com/technology/2018/oct/04/china-planted-chips-on-apple-and-amazon-servers-report-claims

 

In addition to the above, there is also the underlying geopolitical aspect between the hegemony of the USA and the new kid on the block agitating the USA’s dominant position. When taken into account the various pieces of information, to untangle these issues could be further in the future than first thought. (if ever) 

Any company that as it’s furniture supply lines positioned solely in China should have already begun or have already switched some of those furniture supplies to other countries by now. 

 

As this situation is complex and no business can risk hoping and waiting for a resolution, we deal with our experience of making furniture and custom furniture in Vietnam.

 

This post does not deal with setting up your own factory in Vietnam, for some information on these issues, you may want to review this article https://www.scmp.com/economy/china-economy/article/3018403/chinese-manufacturers-returning-home-inefficient-vietnam

 

This post solely deals with sub-contracting and sourcing from established factories in Vietnam. Let us explore the five of the most important questions and issues, relating to supply, it’s consistency, quality and what is the best approach in building a quality supply chain.

 

  1. You are not the only buyer coming to Vietnam. The influx is putting a lot of pressures on wages and capacity so keep this in mind in your search.
  2. There are two supply chains for buyers coming to Vietnam to consider:
    1. Buy direct from factories
    2. Buy from sub-contractors – This is the area of our business
  3. Option A.
    1. Vietnam is not China, what I mean by this, is a lot of companies have been able to purchase from China with no management or quality control staff on the ground, this is not advisable in Vietnam. Of course, there are suppliers in Vietnam that will ship your products at 100%, but to my knowledge, these will be Western-owned factories only with the costs of product reflected.
    2. You will need full detailed product drawings for Vietnam and samples take time here, unlike China, you can give basic drawings and somehow they will fill in the blanks and have your sample ready in a few days! It is not quite like that in Vietnam, you will need to have your product information ready and organized.
    3. You will need to put experience middle management on the ground train your managers and QC staff. Third-party QC companies are in my view not advisable.
  4. Option B
    1. This is where our company comes in. (we also develop and design our own products so you do not have to)  We take away these setup costs and the timescale involved, not to mention the pitfalls and staff turn over that it takes to get your QC team off the ground.
  5. Yes but I do not want to pay more than the factory price.
    1. Over the years we have such a database built of the suppliers it would take you some time to delveolpe the same, these suppliers do not export directly they are sub-contractors used by factories, factories who do not see the need to start their own metal shop or foundry etc. You will be surprised at the price you will pay.
    2. With the price of our products, you will have the added layers of experience and technical staff on hand taking care that the products you have ordered do not come back once they are sold.
    3. We are a western owned company and understand the importance of not only the quality products, but the communication chain is updated and responded consistently and timely
    4. We have buyers that buy direct from factories (usually western owned) and from ourselves as our prices compete very favourably with many factories.
Trade Wars and Moving Furniture Production to Vietnam. post was first published on: by: Admin

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