In this episode...
Our CEO Renaud is back with Adrian and talks about a serious problem for buyers: unauthorized subcontracting.
This is where the supplier you think is manufacturing your products, outsources the work to someone else that you have no knowledge of and haven't given permission to work on your products. This, obviously, is not a good situation...let's explore it in more detail.
00:00 - Greetings, catching up with Renaud, and some discussion about his India trip and the various content we created about it (check the links below).
04:13 - Introducing the topic: Unauthorized subcontracting.
05:04 - What is subcontracting/unauthorized subcontracting?
07:45 - Why this happens in China quite a lot and how it affects social audits.
What problems does unauthorized subcontracting cause?
12:41 - Non-compliance.
13:41 - Poor quality.
17:51 - IP at risk.
19:26 - Products made in banned areas or staff where slave labor is a concern.
How to reduce the risks of unauthorized subcontracting happening?
23:16 - 1. Factory data collection.
26:45 - 2. Plan to improve capacity and reduce delays.
32:40 - 3. Sign a manufacturing agreement with the supplier.
34:09 - 4. Give the supplier a pre-order confirmation.
35:57 - 5. Follow up on production.
36:38 - 6. Utilize unannounced audits.
41:14 - Extra: Travel to China in Summer 2022.
44:13 - Wrapping up.
- How To Create A Valid Manufacturing Contract In China To Protect Your IP
- Read a whole series of blog posts about vetting Chinese suppliers to help you find a lower-risk supplier
- Renaud was interviewed about social audits in this news article - unauthorized subcontracting has a serious effect on these
- Get help from Sofeast to source great suppliers
- Audit your supplier's processes with one of our process management audits in order to reduce the risks of them not coping and subcontracting
- Sofeast project managers check on and manage your supplier to assure that the project is on track
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