Making It Work: A Primer for Overseas Customers

Executives familiar with Asian supplier relationships offer some comforting advice

by Teri Tan -- Publishers Weekly, 6/24/2002

Remember wincing at the thought of manufacturing in China or Asia, say, 15 years ago? Remember the immediate thought of sweatshops? Well, if you still have that same image, erase it. It's time to rethink outsourcing in Asia.

If you dread looking offshore for your manufacturing requirements, you are not alone. Many production personnel cringe at the thought of venturing outside their safe, familiar circle of contacts and getting entangled in cultural differences, international logistics and legalities. But the verdict is in: if you are searching for high-quality, cost-effective and reliable suppliers--obviously not the garden-variety type--then, chances are, you will find them outside your geographic borders and, most probably, outside your time zone as well.

Conventional wisdom summarizes printing halfway around the world as a tragedy in progress. But take note: we are no longer in the conventional mode; we are in a digital world where the conventional frequently bites the dust. We offer some general--and pithy--advice that may boost your confidence:

Don't let the word "outsource" scare you away.

Analysis creates paralysis. You can't be 100% sure of anything.

Things have changed for the better over time. If you previously had a not-so-pleasant experience with an overseas supplier, don't look back and don't hesitate to give it another go.

Manufacturing offshore isn't rocket science; neither is communicating over the phone lines, for that matter.

In this report, publishers from the U.S., the U.K. and Australia share their experiences and shed some light on the often murky waters of offshore manufacturing. Their setup may be different from yours, or their experiences richer, but do not despair. With a little courage, a healthy dose of patience and some homework, you also will enjoy the success of seeing your products manufactured across the oceans and bringing them home safely.

London-based Templar Publishing does almost 80% of its production in Asia, primarily by established suppliers in Thailand (SNP SPrint), Hong Kong (SNP Excel, Hung Hing, Leo Paper) and Singapore (TWP). A huge chunk of these projects deal with novelty-related products and the occasional thin-cased book. Templar's product range extends from pop-ups, texture books or books with holographic stickers, acetate sliders, sound chips, embossed text pages to those with holographic foil and die-cut windows. Famous for its Snappy series, Templar has been working with Asian suppliers for the past decade. Its recent bestseller, the BusyBugz series, was produced by Hung Hing, with an initial printing of 200,000 copies. There is also the Maurice Pledger pop-up series accompanied by textured and embossed pages, which has produced close to five million copies since 1995.

Production director David Birdsall at Templar shares the following steps and observations gathered from years of experience dealing with Asian suppliers:

Get to know who is reliable and who is not through networking. Search the Internet, delve into directories, get in touch with trade councils/associations if further assistance is required.

Be aware that almost no Asian supplier will state upfront their inability to meet your project requirements. Understand that this is a culture thing; it's never their intention to mislead you.

It's best to deal and work with established suppliers, at least for the start. Better yet, consider those with rep office(s) in your own country first. Dealing with established suppliers will give you peace of mind when it comes to copyright/piracy/code of conduct issues.

Interrogate the supplier on their quality control and safety testing procedures, especially if you are dealing with book-plus items or small objects.

Get them to walk you through their approval procedures before printing/manufacturing a product. Know where they may not be up to your standards, perceived or otherwise.

Make sure you see the mock-ups, verification samples, samples of fabrics, etc. Make sure the mock-up materials you are seeing will be the same used in actual production.

Instigate a regular status-reporting system so you know where you are with each title at any given time.

Ask your new supplier to talk you through a recent problem they encountered with your project and explain how they dealt with it.

"If they say they haven't had any problems, they are most probably not telling the truth," insists Birdsall. "The main test of any working relationship with Asian suppliers is not the 85% of projects which go well, but what happens when there is a problem. The last thing you want is a supplier who turns his back when a problem arises. If the approval procedures are followed through, any problems should have come up before the start of bulk production. And it should be crystal-clear where the problem lies."

For Birdsall, the biggest and most obvious barrier to offshore outsourcing is language/communication. "But once you get to know your supplier, you will quickly see how good their communication is," he notes. Birdsall confirms our suspicion of sweatshop fears among his counterparts in the U.K. His advice is simply, "Get on the plane and pay the supplier a visit." He has this to share: "When I first visited SNP Sirivatana--located near the Cambodian border--seven years ago, what I saw was a small, dusty village with the odd streetlamp, the odd motorbike and a ramshackle roadhouse. Over the years, the infrastructure has improved and Sirivatana's sustained growth/presence has brought prosperity to the area. The plant is definitely not a sweatshop; the conditions there are excellent. And you will only get to see these if you visit your supplier."

He further advises, "There are industry standards relating to the national school age, working hours, working days, etc., which companies like Disney set out and audit. Templar has a 'charter' with all our suppliers that forms the basis of the information we pass on to clients who inquire about working conditions. It is important to establish this with any new supplier."

Birdsall is optimistic about Asia's dominance in novelty-based manufacturing. "I cannot see where else we will be able to produce this type of product economically or, indeed, where potential competition would come from."

David Zable--now Zebra International Productions, a New York consultancy for special clients requiring assistance with manufacturing print products, especially offshore--notes that the immediate concern after September 11 regarding security and delayed shipments has not caused any major shift in bringing work back to domestic suppliers. "The movement of projects appears to be back where it was prior to the attacks," he says. For Zable, who has years of experience dealing with publishers and Hong Kong/China suppliers, scheduling remains one problem area: "When the publisher is late with some material, they still expect the supplier to make up for lost time. There is no solution here. It will continue as long as the supplier is capable of rushing out the project, despite near-impossible deadlines. If they don't, then that particular failure will be remembered much more than their past accomplishments."

As for whether Hong Kong suppliers have lost some competitive edge due to the U.S. dollar peg, he remarks, "The suppliers are getting stiffer competition from Europe in color adult books, but Hong Kong remains the choice for manufacturing juvenile products and book-plus, which is a growing area." Zable also believes that CtP capability is becoming a prerequisite for publishers when it comes to offshore manufacturing: "Before, many printers could rely on subcontractors to provide both the service and equipment. Now, if they are not able to provide in-house CtP service, they risk not getting the project."

Walter Foster Publishing (WFP), which specializes in art instructional books, books-plus and activity kits for all ages, has worked with Hong Kong/China sourcing and manufacturing vendors over the past 10 years. Projects are divided primarily between two major printer-packagers, where about 80% of its titles are produced and assembled, but WFP has also used Korea- and Singapore-based suppliers.

Based on his experience, WFP publisher Ross Saraccino says that the initial and ongoing challenges of sourcing and manufacturing in China range from "negotiation of payment terms, communication barriers and uncovering lingo differences" to "getting pricing and samples within a reasonable time frame." Saraccino adds, "Requests must be closely managed and carefully followed up." But he is quick to note that over the years, the company has witnessed marked improvements from Asian suppliers in terms of quality and consistency. There have also been "gradual improvements in safety programs and cleanliness in mainland China factories." WFP credits labor codes and audits by licensors such as Disney, which takes an aggressive stand on such issues. The company also ensures safety and labor standards are being met by sending its production manager to Hong Kong/China every year to visit the factories and offices of its suppliers.

For Watts Publishing (U.K.), liaison with Asian suppliers is not something new. The company started doing so in 1987 and now has contracts with eight preferred suppliers. The split on production volume is 5% in Thailand (with SNP Sirivatana) and 60% from other Asian suppliers. The balance is done in Europe. Watts specializes in children's books--novelties, boardbooks, picture books and nonfiction, mostly in color and all in co-editions. Some recent titles manufactured in Asia include I Will Not Ever Never Eat a Tomato, Shout Daisy Shout, Where the Fairies Fly, Auschwitz and Rumble in the Jungle.

Elaine Ward, production director at Watts, has the best advice on those contemplating outsourcing in Asia: try it--you'll be pleasantly surprised! And she continues: find a good, reliable book production source by checking out which other publishers they do work for in the U.K. and U.S.; the best bet is those with accreditation for Disney and other trademarked producers if you are doing novelty products; try to meet face-to-face with the rep or vendor to get a measure of them; and, most importantly, do sample work first.

"The steps to achieving great customer-vendor relationship is the same as with any other company in any part of the world: they have to understand your business first, before they can give you good service, so brief them well; the customer-service person has to talk the same language; and they must be focused on your account," she says. "Having an excellent English-speaking customer-service manager at any Asian suppliers is now expected, rather than a plus. As for time differences, we do not perceive that as an issue--most Asian companies are available up until midday our time, and we just have to refocus our day around this. It's like our rights department here having to work around the U.S. time barriers."

How about cultural differences? "Well, a clash or misunderstanding happens only when the correspondence turns descriptive. If you stick to terminology and visuals, there is never an issue," she says. As for materials availability, she says, "If the suppliers control their businesses properly, this is no problem."

Ward says growing pains are now a thing of the past in the main Asian markets. "These problems have been cracked here. The new, emerging Asian markets are the ones that need to be worked on." And she is practical when it comes to manufacturing in Asia: "We will continue to use Asia as our main supplier source so long as the financial gains are available and timing allows." In her opinion, quality and service from these suppliers has increased, as it has with most suppliers elsewhere. "The substantial change is in turnaround time--both printing and shipping times have decreased. There is also quicker makeready and lower reprint runs available."

Joanna Carolan of the small, Hawaii-based Banana Patch Press says, "For my first project with PacRim International--an illustrated, full-color book entitled Ten Days in Hawaii--their California office handled all customs clearance, coordinated all shipping and samples from their Hong Kong office and promptly sent samples of everything I requested. There were absolutely no problems. Their price quote was significantly lower than those from U.S. suppliers." Carolan has used Hong Kong/China suppliers for other products before, and she says, "I have consistently experienced faster response and better communication with Hong Kong/China suppliers than with many U.S. suppliers. Because of potential language barriers, I prefer dealing with a Hong Kong supplier with representation in the U.S. Digital files and images sent via e-mail have also bridged the time and language barriers somewhat. Most companies I have dealt with have a policy of sending samples, so that helps." These are definitely words first-timers or those thinking of jumping onto the offshore manufacturing bandwagon need to hear.

"You get good quality, fast service and excellent price, even factoring in the shipping costs," Carolan continues. "Many companies in Hawaii outsource to Asia, so there is no sweatshop perception here. However, I think it is important to research the company you choose to deal with. Visit if you can. I believe that as the standard of living around the world becomes higher, prices will increase accordingly. But even if manufacturing costs in Hong Kong/China go up, the fast and efficient service that they provide would still give them a competitive edge. The quality of their color printing is so good that it seems very few U.S. companies choose to compete in that market."

Paul Latham of Images Publishing (Australia) also has only good words to say about Hong Kong/China suppliers. This publisher of quality architecture and design books, with recent titles such as Public Art, Glenn Murcutt, Architecture Yearbook Volume 8, Class Architecture and Custom House, usually prints 5,000 to 10,000 copies for worldwide distribution. Images started using Hong Kong/China printing houses in 1992 and three or four suppliers are contracted to produce almost 80% of its total volume.

So what's his take on the sweatshop perception in the U.K. and U.S.? Latham waves it aside and says, "We know for a fact that workers in China are treated extremely well. But we have to understand that the cost of living there is very different from other parts of the world." For Latham, relying on the suppliers' integrity and QC management is enough to produce the desired quality books, fast service and timely delivery. "Usually, we just maintain constant communication to keep track of the progress throughout the course of the manufacturing process." But first, he makes sure the supplier chosen is a known quantity and of unassailable reputation.

"We still feel a little concerned about the copyright issues in China. But ultimately, we have to rely upon our relationship with our suppliers to ensure that they print only the quantity we require. I am sure in several instances this has been flaunted, but we cannot prove it," he says of the rather sensitive topic. But hopefully, with the WTO tightening the copyright/ piracy regulations, these concerns will soon be a thing of the past.

For production director Louise Kurtz at Abbeville Press--a brand name in fine art and illustrated books--her relationship with Hong Kong suppliers has already passed its 20th-year mark. Will she look elsewhere for new suppliers? "No, I still see Hong Kong as an answer for publishers like us, who insist on high-quality, full-color printing, while at the same time having to be extremely vigilant about costs." Abbeville manufactures about 85% of its volume in Asia and only 5% domestically. At present, major suppliers are Toppan, Paramount and Dai Nippon; these companies provide pre-press services as well. "They usually provide wet proofs, which is a tremendous advantage, as we get to see the color pages proofed on text stock," Kurtz notes.

As for dealing with new suppliers, here's what she has to say: "There will definitely be some challenges in building a relationship with a new supplier, whether they are down the block or across the ocean. You just have to work at it, and it's important to outline your expectations from the outset. You also have to pay more attention to your communiques, as they may not share the same first language as you. Another trivial but important thing is the different ways of writing dates. This difference, if gone unnoticed, may just wreak havoc with your scheduling! Of course, it doesn't matter what time of the day you send or answer e-mails from Hong Kong. What is important is dealing with it before leaving the office, and not the following morning, or you have lost a full workday."

Abbeville's In Your Space, which is printed by Paramount, and The Russians Emerge, printed by Toppan, are just hitting bookstores now. Other recent titles produced in Hong Kong/China include Caravaggio (Toppan), The Best of Leifer (Paramount) and The House of Philip Johnson (Toppan). Take a peek at these titles and you will see why publishers continue to send their work to Asia despite strong competition from Spain or Italy.

Remember: When you work between cultures and time zones, day one is often not the issue. It's day 30, day 60 or day 120 you have to worry about. That said, bear in mind these famous words: no venture, no gain. So take out your estimation sheets and start working the phone now!