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We know that almost all Swedish/foreign companies that have established subsidiaries with or without production or that have started to subcontract production to China have problems.
China is the right place to be but there are many pitfalls and the base for a decision to open up there are many times not complete. The problems that occur needs to be corrected as soon as possible and in a strong and decisive way. Or of course even better to avoid the problems through better preparations from the beginning.
The story is always the same. A lot of efforts and costs are spent to get started. Then a short “honeymoon” when everything seems to work in the right direction. Then quality starts to deteriorate, communicating worsens and expensive resources have to be sent to China to try to clear up the situation. Sometimes this works – at least for a while.
This problem occurs even if the parent company sends out expensive personal from headquarters to China however after a while they get stuck.
But most of the time stronger action has to be implemented to make clear for the local organization that the a change is necessary – and will happen.
The reasons for this are many and are deeply built in, into the Chinese business culture. This includes lack of experience on a personnel level as well as national level to run certain business – especially production. In addition it is very difficult to hire the right personnel and to handle what is very important in China – relations.
Once the problems have started it is very cumbersome to change it within the existing organization. A proven concept then is to use an external resource that can be trusted and that understands both western and Chinese business culture.
Inside China is such a resource.