Published: August 2013
Finding a successful supplier is possible. Here are some steps to take:
- The buyer should be very clear in their own mind about what they want to buy. All the details that can be established – size, color, features, performance, style, artwork, quantity, and timing - should be decided upon and a list made.
- All needed artwork, funds, assignments of team members, should be available before shopping for the supplier and the product starts.
- Of the hundreds of companies that make ebikes in Asia, about 60 build the majority of all ebikes. The rest of them assemble kits or build in small quantity for a local market.
- Of those 60, about 30+ have experience and a track record in exporting. Of those, each has something they do well – such as serve a particular market, or build with a particular propulsion system. All of them have weaknesses to accompany their strengths. Identifying these suppliers and sorting through their capabilities and offerings may be more complicated than visiting websites. Most of them do not have good websites, some have no website. And they generally are not very responsive to email inquiry. Visiting them at their offices, or meeting them at the show may be needed.
- For most buyers, the process of sorting through the suppliers will result in 5 or less companies that are appropriate. Narrowing that down to 2-3 is necessary, as trying to buy from more than 1-2 will simply result in not buying enough to be interesting for any supplier. And managing the relationships will be too much for small companies.
- If an existing product is acceptable, then a detailed and priced (every part identified and priced) Bill of Materials needs to be created. And an example of the product that conforms to the expectations of both the buyer and the supplier created and agreed to as the example that will be the standard for the products to be purchased.
- If a new product must be created, it should be regarded as a very serious and time consuming project where both parties must work together assiduously. The process needs more explanation than can be given here. And it will require substantial investment in engineering, tools, etc.
- Buyers need to understand that for the supplier to meet with them, explore a new business relationship and perhaps create a new product or modify an existing product costs the supplier money. They are, in a way, investing with the buyer, and usually more than the investor is aware. One OEM told this author that just to discuss with a possible buyer usually cost them $4-5,000 one way or another. And to create a new bike cost at least $60,000 and often much more (engineering time, tools, samples, meetings, travel, etc.). One designer of note stated that a budget of 1.5 to 3 million US was about right for creating an attention getting product with new features.
- The big boss of the buyer, and the big boss of the supplier need to meet and have comfort working with each other. Without this, the relationship is too fragile. If the bosses are too busy or too important – this is not a good relationship.
Once a supplier has been selected, and the product / price / delivery dates/ production dates/ agreed on- the buyer must stay engaged in the process.
A very important task is for a representative of the buyer to be at the factory before the scheduled production days. During that time, the incoming parts should be inspected to see if they are the correct parts as specified on the Bill Of Materials. And to see if there are any problems with those parts. This can be a big job – and it is not practical to test every motor, or every controller before assembly day. But visual inspection and some random testing may save a whole production run from failure.
During production, the buyer’s representative should be on the assembly line the whole time. Monitoring the workers, monitoring the parts being used, and interacting with the quality control people to be reactive when problems arise.
There are services (such as eCycleElectric) that can supply experienced people who are expert at the details of electric bike manufacturing and can both detect problems for the buyer, and help the factory and the workers correct problems. There are other services that can do little other than count bikes and be sure they are the right color. This is usually not enough for ebike industry.
A number of bikes should be pulled out from production, assembled and test ridden. Both the bikes and the packaging should be examined. Then repacked and lessons learned applied to the work in progress. Once the bikes are in the container, and the container is sealed, the work becomes the preparation for after sales service.
Enough parts need to be ordered to support the bikes in their destination market. Technicians need to be trained at distributors and dealers. And information needs to flow back from the dealers / consumers to the factory so that the product can be improved.
An important attribute of a great supplier is that they are always seeking to make each container better in quality and customer satisfaction than the last one. And that they are listening carefully to complaints and suggestions and making changes as fast as possible when such feedback occurs.
This requires strong effort from the buyer – a complaint that “the bikes are no good” is not useful. But a complaint (example) that “all of the bikes have kickstands that bend too easily, and the batteries do not fit securely in their box – so they rattle and make noise” can lead to solutions, quickly.
For electronic and electrical issues, a higher level of technical expertise is needed at all levels. Using data loggers to detect and report on controller / motor / battery issues can communicate what is needed more reliably and quickly. Especially when parties in the supply chain are using the same software, same testing equipment, and same technical vocabulary.
Business issues, such as payment, shipping dates, communications, are complex enough that everyone should anticipate problems, and be prepared to solve them amicably and thoughtfully.
Acknowledging every email, even if you do not have an answer (“I received your email, and will reply to this question within XX hours or days”) is important. It builds trust. Knowing that your words may not be completely understood is also important. Too many times, people at both ends are using a language that is not their native tongue to discuss important business issues – and problems arise as a result.
Each successful shipment becomes a building block of trust and cooperation. Each one has the chance to destroy the relationship and the business, or to make it stronger – for both parties.