China may be a communist country politically, but capitalism is thriving there. In fact, it is the world’s largest producer of manufactured goods.
It’s been the ideal place for Rich Heidrich, President/CEO of Designs Direct and his two partners to manufacture interior home and commercial products.
If you’ve never been there, your perception of China, its people, and the government’s influence on business is probably very different than the experience of Designs Direct over the last 16 years. Take a listen.
WHAT YOU’LL LEARN FROM RICH HEIDRICH, PRESIDENT/CEO OF DESIGNS DIRECT
HOW RECEPTIVE IS THE CHINESE GOVERNMENT TO U.S. BASED COMPANIES MANUFACTURING THERE? (4:27 in)
In Rich’s words – We had very little dealings with the government. Our first introduction to China was through a Taiwanese agent. The Chinese government was very receptive on our second trip because we weren’t really interested in doing business the easy way.
Tip – Connect with someone who has experience doing business in China.
HAS YOUR RELATIONSHIP CHANGED WITH THE LOCAL AND NATIONAL GOVERNMENT OVER THE YEARS? (6:22 in)
In Rich’s words – We really don’t have much interaction with the government. Some of our factory owners do. Most of the interaction we have today is through social engagements.
Tip – Find reliable in country partners to manage most government relations.
CAN YOU SAY YOU CAN OPERATE THERE IN A SIMILAR WAY TO WHAT YOU CAN DO HERE? (7:43 in)
In Rich’s words – I would. We feel the brunt of the government, but it’s all for the good. We don’t feel it directly.
Insight – Manufacturers have an obligation to adhere to government regulations and client standards concerning the manufacturing process, labor laws, environmental standards, etc.
WHAT ARE THE BIGGEST CHALLENGES TO MANUFACTURE IN CHINA? (9:11 in)
In Rich’s words – Biggest challenge would be speed to market and maintaining secrecy about our designs and intellectual property.
Insight – Retailers are now expecting delivery in half the time they used to receive it.
HOW MUCH TIME TO YOU DEVOTE TO MANUFACTURING VERSUS OTHER ASPECTS OF YOUR BUSINESS? (10:40 in)
In Rich’s words – We have great partners that we work with in China. I don’t have to spend as much time on manufacturing as you might think.
Tip – Having good partners and good relationships makes the difference.
ARE THE SKILL SETS OF THE PEOPLE THERE READILY AVAILABLE? (12:00 in)
In Rich’s words – No. That’s an ongoing problem. It’s not too unlike the United States. Children (now grown up) don’t want to work as hard as the parents.
Insight – It’s an ongoing challenge to find and train people, fill the order pipeline, and ensure that the end product is produced on time.
HAVE YOU FACED STEALING OF INTELLECTUAL PROPERTY IN CHINA? (14:16 in)
In Rich’s words – We have. We continue to. We have built really strong partnerships with some of the factories that we work with. They recognize that should they release our images, share our designs with others that would affect their business.
Tip – The best deterrent is having trustworthy partners.
WHAT ADVICE DO YOU HAVE FOR SOMEONE WHO WANTS TO MANUFACTURE IN CHINA? (15:10 in)
In Rich’s words – Find someone who has been doing business there for at least five to ten years. Find a company that’s been there, done that, recognize the pitfalls maybe you’re not going to here from a government introduction.
Tip – Watch out for the person who is just looking to make the quick buck.