How to Keep from Being a Hostage to Your Factory

by Tracy Leigh Hazzard on July 29, 2013

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Chip Starnes, the executive held hostage for 6 days in his Beijing, China factory found out the hard way that Chinese workers are unusually empowered in labor disputes. To some, this might seem like an isolated incident, but it is not. As product designers, we spend almost 3 months each year working with our clients’ factories in China and these heavy-handed and unusual negotiation tactics are very common.

We have seen refusals to sign contracts, tooling lock-down, thwarted kidnapping and even embezzlement resulting in a complete factory closure. All of these are results of an extreme lack of trust between workers and employers as the acrimony between U.S. customers and Chinese suppliers increases.

On behalf of our U.S. import clients, we have developed some ways to ease the mistrust and build a better partnership. We also build safeguards into the products we design so if things go awry with a factory, we have flexibility to avoid damaging business interruptions.

Partnership Building Tips:

  • Eat the Food – Every time we are in China, we take extra time to visit our supply factories to build a stronger relationship. We know of company CEOs and executives that refuse to eat the local food. Having a meal and tasting their local cuisine inspires trust and builds respect. It is also delicious.
  • Honor the Team – Once during every visit, we take our clients entire direct service team out for a meal. We thank the team in a short toast. We open ourselves up to each other as people. We know who has kids, who has a sick mother and who has the best jump shot.  Although they do not work directly for us, we know that they will come to us first if there is a problem or dispute. We can and will advocate for them with our client.
  • Be a Good Host/Hostess – Too often when our Chinese associates come to the U.S., they are left to their own devices by their employers. Just because they speak English doesn’t mean that hosting is optional. We invite them to our home for dinner, make sure they are escorted and use our upgrade benefits when we fly together. Being a reciprocal host shows respect.

Product Safeguards:

  • Design Ownership – Our clients hire us to provide unique design. Design that appeals to the U.S. consumer, especially women.  Design that is not just sourced from a factory. But there is a significant added benefit to using design outside the factory – you own it. This means that if things go wrong and you want to resource the design elsewhere, you can.

One of our import clients (prior to working with us) sourced a factory-direct design, had them make some minor modifications to it and sold it to a U.S. retailer. When it came to manufacture it, they went to multiple factories to get the best price. The original factory felt betrayed and filed a Chinese design patent then had a cease and desist notice sent to the new factory. Luckily, we were involved at the tail end and changed a major component before it went into production. Otherwise, the new factory would have lost the dispute and been unable to manufacture and our client would have lost the placement with the retailer.

 

  • Patent Protection – While we don’t file utility or design patents on all our designs, we do recommend them to our import clients in highly competitive situations where resourcing might be a possibility. That way the retailer has no choice but to continue to buy from the importer instead of directly source with factories.

 

In the U.S. we have a history of high regard for worker’s rights as well as a healthy respect for inventors and intellectual property. This consideration should be extended to our Chinese partners as well, especially if you want to avoid being caught in the middle of a hostile dispute.

 

About the authors: Wife and husband team, Tracy and Tom Hazzard have spent the last 20+ years since graduating from RISD living and designing together. As embed consultants, they solve the problem of what product to design, how to make it cost effectively, how to connect with the consumer, and, most importantly, how to stand out competitively. You’ve likely bought one of their licensed or contracted  designs at mass market retailers like Target, Staples, Costco, Walmart, and more. At www.hazzdesign.com they share their process and thoughts on Design for the Masses and Genderblend™ Design, designing for women without alienating men.

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