Don't be trapped by a Supplier

You have to know who and what your supplier is before you enter into a contract with them. Otherwise it is going to cost you plenty.

We had one customer that made and supplied locomotive brakes to locomotive manufacturers. He signed sign up with a Chinese supplier located in Beijing through a Canadian manufacturer's rep. We sent in two AMREP technical engineers to be trained by the Customer's quality engineering director at the supplier's location. No inspection and training was done because the supplier did not have the technology and the factory's equipment was not usable. The factory was a state owned company and it depended on a university lecturer from the mechanical engineering department of the local university to help them set up the factory's manufacturing process. Our customer had to talk to his management about spending money, their own engineers from the US and equipment on the supplier to get something to work.

Another customer went with us to look at a supplier who had to be FDA approved. The supplier's factory was located at a fishing village and our inspectors could not inspect anything because the factory was a reconverted fish storage warehouse. Our Customer found that the supplier was using the name of another supplier and was represented by a US manufacturer's representative which had given a good sales presentation. Our customer had to then invest money in upgrading the supplier in order to get FDA approval.

You do not have to do much to get your customer to put in more money into your factory even before you begin production for them.