China's manufacturing has primarily been export-driven. This has been due to a large historical price gap. Other gaps, however, have resulted in huge costs, long delays, and a lack of knowledge for manufacturers, buyers and end customer expectations. These are information transfer gaps.

To improve supplier management, these information gaps must be sealed. Companies are doing this through end-to-end supply chain monitoring. A method for linking the manufacturer with end expectations will reduce operational risks. Likewise, conveying manufacturer production and lead time expectations to the customer can reduce costs.

Examples in Product Dying
Information and material flows in product dying are complex. Color pallets are created by designers. The pallets are then translated to dying machines. Once confirmed, dying colors must be maintained within a variance to minimize coloration discrepancies. If just one process occurs incorrectly, work-in-process inventory can turn to waste.

The challenge is translating the color pallet to the manufacturer. This takes technical knowledge of machinery calibration and material characteristics, engineer to engineer. Unfortunately, errors are caused by knowledge transfer from marketing staff to engineer. For example, a foreign buyer switches suppliers in China. The color pallet is referenced as displayed on the buyer's website or a sample is provided. Is the new manufacturer expected to recreate the color only by sight?

The Problem Permeates Sourcing
Many companies face this reality daily. With far removed buyers more closely associated with higher value added marketing and branding, technical knowledge needed to address engineering challenges is often left to the manufacturer's discretion. Here is another example.

In the apparel industry, raw material is defined by the end-customer in terms of feel, fit, and perceived value. The buyer's responsibility is to translate these qualitative characteristics into tangible products. There is a divergence in the production process, however. The buyer relays marketing language such as 100% cotton, feels cheap, and wrong shape. The manufacturer relays material specifics in technical language: vertical and horizontal thread count, weight per square meter, and stitch width per mm.

To address this issue, technical knowledge must be conveyed directly to the manufacturer. Passing through intermediaries may create potential miscommunications. On-the-ground teams who understand the product, material and process specifics are essential. To minimize the risk of error, bring the customer to the manufacturer.

With rising costs, it is clear China is entering a new phase. The new era will focus more attention on customer-driven metrics instead of direct cost and quality. Being closely integrated in supply chain flows will be essential for supplier managers to unlock once hidden productivity and efficiency gains. As global supply chains become longer, sustainable advantages will be solidified through increased collaboration in supply chain operations.

Bradley A. Feuling is the CEO of Kong and Allan, based in Shanghai, China. Kong and Allan is a consulting firm specializing in supply chain operations and global expansion.