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Stoven
Newbie
Joined: June 06, 2006
Posts: 3
Location: Portland, OR, USA
Status: Offline
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 Posted:
June 06, 2006 - 02:24 PM |
 
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| Post subject: Sourcing / Engineering Consultants Questions |
Hello,
Is it difficult to become an agent or sourcing/engineering agency?
I currently work as a Design Engineer for a consumer products company and work closely with factories in China and Taiwan. My current employer works with a few different agents.
After talking with some of the agents, they seem very happy doing what they are doing. The agents I work with do not have any technical background which I feel is an issue.
The common way we would communicate with the factory owners is through the agent. Basically, it is technical talk which is filtered through a non-technical person. We discuss issues in english to the agent and the agent then tries to translate it to the factory owner and their engineers.
My employer has been trying to cut out the agent and work directly with the factories. They have done this by employing Chinese Engineers in our Shanghai office. For some reason, the Chinese Engineers that get hired don't know much or are not helpful and make things more difficult than working with an agent. Also our Chinese Engineers tend to not last long before quitting, which I hear is common.
What I am getting at is. I have been thinking about becoming an agent or possibly starting an engineering/sourcing agency.
My idea would be to supply U.S. companies with total engineering/sourcing solutions. Basically, my "company" would be able to develop consumer products from ideas to actual production for our customers. This would include Industrial Design work up front for product conception which would include product renderings in photoshop/Illustrator and 3D surface models in Solidworks.
My "company" could then engineer the product into reality and work closely with Chinese factories to build initial prototype/validation samples.
My "company" could then work with the U.S. customer to fine tune the design and possibly build 2nd or how many prototypes is necessary until the U.S. customer feels confident with cutting tooling POs.
My "company" would then manage the product development cycle to ensure ontime delivery and first article approval.
I think my company could easily be successful once I land a customer but I am still unsure of the idea. I am relatively new in my career and all the agents I have worked with are nearing retirement. The easiest way for me to get started is to find a U.S. company that would need my services.
I have a few engineering friends that would probably join my "company" if it started taking off. They speak Cantonese, Vietnamese, and Korean and vary in fields such as Mechanical and Electrical Engineering as well as purchasing/logistics. Also my wife is Singaporean and speaks Mandarin and I have a very basic understanding. I could possibly start a company with just my wife.
I have been thinking of doing this for the past couple years. Any comments or advice would be appreciated.
Steve |
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Nick_UIUC
Lurker
Joined: June 08, 2006
Posts: 21
Status: Offline
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June 15, 2006 - 05:01 AM |
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Steve,
I am interested in what you are trying to do, one book that I recently started reading is called "One Billion Customers". Look it up, it's not directly related to what you are doing but has some wisdom about doing business in Shanghai. The book gave me the perspective that you should be very well prepared before you enter business by yourself in China.
I am also looking for opportunities in Shanghai, I have my MSEE form university of illinois and some experience in the RFID, RF design area. At this point I've just started exploring my options there. My safe route at this point is to find a job in an American engineering company, but ventures such as the one you proposed are also of interest to me.
I am also in a similar situation as you, not fluent in mandarin, however my fiance is a native of china, both engineers that met at UIUC. She has a position there waiting for her, and I'm still looking for one.
What specific engineering areas do you want to focus on with your company?
nick |
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bougie
Board Buddha
Joined: Nov 20, 2004
Posts: 13292
Location: Wuhan Hubei China
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June 15, 2006 - 07:06 AM |
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Steve,
Many people or agents "say" they can offer what you would propose, but in my experience not many can execute this properly. Mind you i'm in a less forgiving industry (automotive). I've also considered doing such a thing, but with more of a twist on tooling as some of my contacts are interested in Asia tool sourcing, but not necessarily the parts.
I believe to be successful, you may only need a few good customer. But if you can deliver, I'm pretty sure word of mouth would make your enterprise grow.
Of course, as any business, you know that initially things would be tough. Can you convince your employer to get you here as an expat to serve them first? Then while you're here you can expand your network and have your wife start things out for you. |
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Stoven
Newbie
Joined: June 06, 2006
Posts: 3
Location: Portland, OR, USA
Status: Offline
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June 15, 2006 - 09:20 AM |
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Nick,
Did you just graduate and are you currently looking for a job? Is your Fiance going to take the job in China or does she want to become a U.S. Perm. Resident? Is your Fiance also a EE major?
The safest bet is also very slow. I've only taken 2 trips to China and Taiwan in the last couple years at my job. I've just changed positions from Manufacturing to Design so I am less likely to go overseas now.
I have a BSME and MSME and my background is on tools, knives, and outdoor products. I am starting to work more with electronics now that I am designing LED flashlights. I am also interested in portable electronics and power tools.
Bougie,
I am familiar with what agents say they can do. But from my experience, it's not the case. I feel that agents tend to just be a middle man that "translates" info from their client to the supplier. If they don't have the technical knowledge, the translation won't be correct. I'm familiar with "Mei Wenti" and I've learned to ignore it.
I've also thought about having tooling made in China since it is so cheap. Tooling for plastic parts in the U.S. is always so expensive and risky if your product does not meet expectations. Since tooling is so cheap in China, you don't have to worry as much since you can easily make your money back.
The downside is what to do when there are issues with the tooling once it is tested in the U.S. It would take too much time to ship it by sea back to China for rework. You would have to open up a machine shop in the U.S. to be able to rework and resolve any issues with the Chinese tooling. Maybe it would be possible to contract local U.S. tooling houses to do the modifications but since they didnt design the tool it would probably be more difficult.
I think the best bet would be to visit the U.S. with the Chinese toolmaker so they can tweak it but it is almost impossible to get the Chinese government to let them leave the country.
My current employer had an expat but his contract ended and he is now back in the states. I have told the VP of operations that I am open to moving to China but since I am seen as "inexperienced" it most likely won't happen. I also was interviewing with a exercise equipment company in Shanghai, but that also fell through since I don't have enough experience.
My main issue with my current job is how I don't feel challenged and I have expressed my feelings to my management and even threatened to leave and almost did but I was offered a design position. I would love to be thrown into something new and challenging but I can't seem to break free of being seen as inexperienced.
Steve |
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Michael
Moderator
Joined: Mar 22, 2002
Posts: 5274
Status: Offline
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June 15, 2006 - 09:41 AM |
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There are a couple of articles on this board starting up. http://tradeforum.my6d.net/phpBB2/index.php
Its not an easy task and the agent, if there good, can be a essential ally to the buyer who may not be able to afford trips to china to check every shipment or to make sure the factory is following spec. |
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chinick
Barker
Joined: Sep 13, 2004
Posts: 171
Location: SH (as in s*** hole)
Status: Offline
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June 15, 2006 - 03:47 PM |
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Stoven,
the new trend for companies is to eliminated the middle-man, as you know. I'm afraid that sooner or later, your ''company'' will get by-passed as well.
Agent might be good to start things up, but once the development is done, the customer will always try to get to the manufacturer directly.
The agents you talked to might seems happy, believe me they're afraid and under pressure.
best advice: convince your company that experience is not an absolute requirement. If you have a brain and discipline (and patience...) you can do it.
Then you'll be the one cutting the middle-man and you'll be able to closely supervise your engineer/technical peoples.
The proof: me
I'm also young, I came here about 1 year ago alone with a clear mandate from my company. I set-up everything and develop many direct and sucessfull relation with chinese manufacturers.
Middle-man cutting is now one of my hobby, no more money for the emails forwarder  |
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Stoven
Newbie
Joined: June 06, 2006
Posts: 3
Location: Portland, OR, USA
Status: Offline
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June 15, 2006 - 09:25 PM |
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Chinick,
I understand that the trend is to eliminate the middleman. The company I work for is in the process of doing that. Since the middleman introduced the factories to us we can not go around them so we have gone direct to new suppliers.
My idea is to be a middle man to help companies start manufacturing overseas knowing that it will only last 1-3 yrs before they learn to go direct. The main thing is to constantly find new customers that need your service.
I highly doubt my current employer would ever send me overseas to live. They were even too cheap to send me on trips there. I've been told that I would be going to China and then be told I'm not. There would be arguments between management on the subject and in the end I didn't go. This has happened multiple times.
My employer views experience much higher than education. Our ex-expat was originally a factory worker that worked his way up to management. He has no college degree. A few of our managers have no degrees including one of the VPs. Even though I have my masters degree, I have been put into a position on the level of a technician that doesn't even require a degree.
I spent the first two years of employment twiddling my thumbs. I asked management to give me something to do because I was bored and unchallenged. I was told they were working on it and in the end nothing ever happened. I told a coworker that I was going to give my two weeks notice, and he went to talk with management and I was given an offer in Design the same day. I passed on a few higher paying jobs with the hope of gaining more international experience in consumer products. So far, it doesn't look like it's going to pay off anytime soon.
Steve |
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chinick
Barker
Joined: Sep 13, 2004
Posts: 171
Location: SH (as in s*** hole)
Status: Offline
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June 16, 2006 - 10:31 AM |
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Then I guess you might start looking for a new employer.
Or tell them, you send me in China or I'm leaving.
Concerning the fact you were not able to go around the agent, it's also getting more and more popular to pay a ''finder's fee'' to the agent in order to deal direct.
Having too much experience of how things work in America is not necessarily a good thing here, since it's quite different. Your boss should know it's not because the previous expat was not successfull that you won't be.
best of luck to you Steve |
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Nick_UIUC
Lurker
Joined: June 08, 2006
Posts: 21
Status: Offline
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June 17, 2006 - 03:27 AM |
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Stoven,
Yes I just graduated and looking for a job there, not expecting american salary of course. My fiance has accepted the job in China and our plan is to go there for awhile and apply for her green card directly in China, then when it's ready come back to the states together, she is an EE Major. Thats our plan, in some ways I feel like we're going backwards about things, that is, that we should work here first then try to find opportunities in China. We are worried however that once we settle down here in America, the children will come and we'll never have a chance to come to China and work. With that said we're thinking it's best to go there for awhile first while we're young. For me, I have no problem going to Shanghai for awhile as long as I get what I consider a good Chinese salary, somewhere between $1500-2000 USD/mo. For me it's not about the money, just a chance to live there, learn the language and have fun while we're young.
We are trying to get a feel for if what we're doing is right, so any comments everyone has on this would be greatly appreciated!
I think what chinick said might work with your employer (the china or leaving idea), it worked when you said you wanted a challenge and threatened them with your resignation... |
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flifox
Raver
Joined: July 15, 2004
Posts: 434
Status: Offline
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June 22, 2006 - 02:26 PM |
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Stoven,
Allow me to join in your conversation at this late stage and add some comments.
Firstly, I am an agent who is fluent in English and Chinese and focus mainly on Austraila. I started with no customers and only the same concept as you. Customers do grow by word-of-mouth - if you are good.
Now to your dilemma. If you are not challenged by your current position / situation in life / environment / future outlook / etc, maybe the first question to ask is, why is that so, and what will make you happy? Maybe becoming an agent will relieve you of the frustration of dealing with an inept agent, but what about the other work issues? All you do is go one step down / up the supply or value chain. There is still another person to deal with, say at the factory, who does not speak in English, who holds different values to you, who takes two hours for lunch, who likes to take laowai customers to drunken dinner parties and KTV, etc. I guess what I'm trying to say is, the grass may not be greener on the other side.
There is a new learning curve to becoming an agent. And if you stuff at it, all it will do is give yourself a bad name and all those who are in the same field as you.
If you do want to become an agent, then there are some pitfalls you should look out for and there are some challenges in working with Chinese factories that you should prepare yourself for. If you want to know some of these pm me or read Mr China. It will give you the flavour of what to expect.
As someone else said, you want to make sure your customers keep on coming back to you and use you rather than go around you. To this end, you should ask yourself, what value do you add to your customers business? Once you know that, ask yourself, how you can sustain that? That will be your sustainable competitive advantage. Don't do what a lot of agents do and that is to keep the location and details of the factory a secret from the customer.
Most customers I've dealt with like nothing more than total transparency and when you can give that to your customers and they can see that you add value to their business, you can then develop the most important of all business ingredients and that is trust! When people are dealing with factories in China or anywhere for that matter, the most important qualifier is trust. So if you want to become an agent, then practise the values and use the ethics that puts you above everyone else in your industry.
I hope I've helped you in your search for where ever it is you are looking to go....
Cheers, flifox |
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