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Examples include:
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Subcontracting
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Contract Manufacturing
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Tolling
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Managing China Business
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Warehousing and Distribution
Many Western companies are aggressively selling their products into China and Asia since these markets represent good opportunities for growth. Their China customers are often Western companies with China-based operations.
As companies compete in China, their goals and expectations evolve - for example, many companies initially export their goods in order to service their China-based customers. Subsequently, these companies will establish manufacturing capabilities in China in order to reduce lead time, cut costs and more effectively service their customers.
For a Western supplier to establish Chinese manufacturing capabilities, they will examine a number of options, including setting up their own factory, subcontracting to Chinese vendors or acquiring a Chinese company. However, many companies determine these options are not in their best financial or operational interests - their reasons include: they may not have the right personnel to manage a China-based operation, the projected capital available at that time, experience executing operational strategies protecting Intellectual Property or the sufficient sales volume to justify their own plant.
Therefore, these companies will leverage East West's experience to serve as their China-based on-the-ground operational and manufacturing team. On a case-by-case basis, the company and East West look at a number of factors to determine the best operational approach to meet the company's short-term and long-term goals - these factors include financial and operational Business Cases, product base, Intellectual Property issues, product lead-time, etc. Once the strategy has been determined, East West will execute this strategy in China.
Our clients note that one real advantage of having East West provide these operational and manufacturing solutions is that East West is a US-owned company and thus, follows the US patent and Intellectual Property guidelines - additionally, we have significant experience developing operational strategies for Western companies to protect their Intellectual Property and successfully service their China-based clients.
We have provided a description of some of the East West solutions - Subcontracting, Contract Manufacturing, Tolling, Managing China Business and Warehousing and Distribution - in order to give the readers an idea of the different operational and manufacturing solutions. However, each company's challenge is different and thus, each solution is based on the unique aspects of the particular case.
Subcontracting - East West provides subcontracting services using the client's equipment to produce their end-product to their specifications. Companies have East West subcontract for them in order to support their overall manufacturing strategy and ensure their Chinese clients are serviced efficiently.
The subcontracting is performed at a 'closed' operation in order to protect their Intellectual Property and allows the Western firm to establish manufacturing capabilities in China with minimal capital expenditures. The equipment is generally retired US equipment which can be imported into China or equipment which East West has procured in China which meet the client's specifications and approval.
Contract Manufacturing - This manufacturing is very similar to Subcontracting, except that East West purchases and owns the equipment.
Tolling - East West will drive the entire procurement, manufacturing, warehousing and distribution process and thus, ensure our client's name is not used on Bill of Ladings, Invoicing, call-in orders or other types of paper trails. This approach helps protect the identity of our customer from their China-based competitors and the nature of their business activities in China.
We provide a turnkey tolling operation for those companies wanting to produce in China for their global customer base. This operation provides IP protection for our clients and manufacturing capabilities to quickly service their customers. East West will set up, manage, and produce to the specifications of our clients as well as develop the raw material vendor base.
Managing China Business - East West designed this service for those companies wanting to enter the China market, establish an Asian presence to service existing clients, mitigate risks developing a new entity or begin doing business in China. East West will set up and manage the China business with experienced East West personnel and work as part of our client's Executive team. Thus, the goal is to develop a successful China business and operation and subsequently, turned over to the client.
Warehousing and Distribution - East West provides warehousing capabilities in China and has a Procurement/Distribution team to manage the logistics of shipping product within Asia Pacific for our customers.
Read Case Study Below:
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