Hooking up with source plants in Latin America
Powell Slaughter -- Furniture Today, March 6, 2005
HIGH POINT – Sourcing furniture in Latin America entails the same due diligence as in any other region of the world, with a couple of other issues specifically related to Latin culture.
Stewart Paul, president of importer Primex, had these suggestions:
* Pay attention to the personal aspect of doing business. Face-to-face contact is essential. “A Latin American factory doesn’t want to disappoint an individual they’ve met in person,” Paul said.
* Rather than order product from a catalog, or merely sending product specs to a factory, visit the plant in person to ensure the facilities have the capability to produce the product in question.
* Before placing an order, make sure you deal with every detail of the product. Meet face-to-face and resolve any open issues such as pricing, quantities and product specifications before ordering any goods or beginning production.
* Use a three-step quality-control process: pre-production meeting, in-line inspection during manufacturing, and final inspection. “You want to isolate any problems with product at the country of origin, rather than dealing with it after delivery.”
For U.S. companies pondering an ownership stake, John Foster, chairman of Rockford Furniture, said a common philosophy and a clear definition of responsibilities are key.
Rockford’s American Woodcrafters line resulted from a joint venture with a Chilean manufacturer of wood components.
“The first aspect of this is: What is your overall basic philosophy? What functions are we going to perform, and what will they perform?” he said. “In our case, I wanted to design and market product. We wanted to make sure the capabilities of the plant marry up to our philosophy, and a lot of times, manufacturers don’t do that.”
Foster noted that historically, most South American manufacturers’ relationships have been with Europeans.
“The manufacturing, the finishing tended to be European-style flat line, but that’s changed in the last five years,” he said. “Once you identify a manufacturer that’s in tune with your philosophy, you want to ask, what are their physical capabilities? Can they make product that sells in your marketplace?”
