Transitions to China can be a cost advantage or disadvantage

One of my readers pointed out that there is a distinctive spin up time or transition time in China for new builds. I agree generically with what they said, but if it is like a current product (that they build today) than that transition time is cut down to a 1/3 or sometimes 1/8. That is, unless you have distinct processes for that part and then you jump right back up. 

First time awards are always very difficult as there is no way for the supplier to anticipate all your needs or cover then in the RFP. So what you end up with is a long learning curve or forced training. Unfortunately in my experience both have to happen. Here are a few steps that I like to have to spin up training. 

1. Bring an implementation team to your site.
   1. The build team should certify on your build and test process.
   2. The MTLs (materials) team should learn your forecast and demand management systems
   3. The PM should learn how you like to deal with DMRs, accounting issues, supplier found problems with the builds define training certification process and define escalation paths for both sides.
2. Transfer all build and test documents you have and ensure that they are translated to the local language.
   1. Have them validate prior to leaving.
3. Ship a set of seed materials to their site. This will enable them to quickly determine if the localized MTL base has built the product correctly and if not, ensure you get supplier while fixing the issues.
4. Before they leave they should be able to build your product without any assistance.
   1. The last build they do should be a golden sample that they will take back to their facility. They can use these as a test golden sample and a build one.
5. Once they get back you need to limit the amount of time before they build their first unit. You don’t want to lose all of that training.
6. Set up the line to imitate yours–efficiency will come later.
7. Verify test set up with golden sample
8. Start producing.

Your PM and theirs will be together during this whole time and your PM or engineer will have to stay past the start producing time to ensure compliance and run any additional issues to ground. 

My generic time tables tells me that:

• Low complexity transitions = 1-3 months
• Med complexity transitions = 3-6 months
• High complexity transitions = 6-9 months

During my transition days, I would spend about two weeks of every month at the supplier’s locations with an engineer augmenting my other two weeks.

Bottom line there is a cost to do transitions, and you will have to do the ROI on whether it is worth it long term. Don’t forget to factor all of this in to your cost analysis before you award. And please if you would like to add something else or have a comment, please comment below. Thanks and good luck.