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Case Study: Entering China, One Step at a Time
For medical products company J.T. Posey, building a manufacturing base in China began by leveraging a "factory within a factory"
Arcadia, Calif.-based J.T. Posey Company, a provider of hospital equipment and supplies to health care providers, owns and operates manufacturing facilities located in California and Mexico. In 2002, however, the company became interested in cost savings opportunities available in China for its "cut-and-sew" operation, which involved the manufacturing of a variety of soft goods.
At the time, Posey had neither the knowledge nor the resources to begin the process of single-handedly establishing a solid manufacturing base in China. Realizing that such a project could potentially prove extremely complex, costly and time-consuming, Posey turned to its contract manufacturer of mainly small, electronic medical instruments, Eastek International.
Leveraging a "Factory in a Factory"
With a fully operational manufacturing facility located in the Guangdong Province of China, Eastek and its new Eastek Access program presented a unique opportunity to help Posey achieve its goal of establishing manufacturing capabilities in China. At the program's core is a "factory-within-a-factory" approach designed to provide a low-risk, quick and cost-effective way for a client to essentially incubate its own manufacturing operation within Eastek's pre-existing campus. During the incubation period, Eastek helped Posey navigate China's complicated business and legal landscape and put the wheels in motion to eventually establish Posey's own operation in the region.
The program's flexibility allowed Posey to choose from a range of services and to determine Eastek's level of involvement in the operation at every step of the way. In Posey's case, Eastek provided the factory space and labor, as well as support in tackling a variety of legal and licensing issues, language and cultural barriers, complex import and export procedures and local government requirements. According to Michael Keefe, vice president of operations for Posey, "We used our own equipment, and with the other services supplied by Eastek, we were able to save on costs and get up and running quickly."
At the time, Posey had neither the knowledge nor the resources to begin the process of single-handedly establishing a solid manufacturing base in China. Realizing that such a project could potentially prove extremely complex, costly and time-consuming, Posey turned to its contract manufacturer of mainly small, electronic medical instruments, Eastek International.
Leveraging a "Factory in a Factory"
With a fully operational manufacturing facility located in the Guangdong Province of China, Eastek and its new Eastek Access program presented a unique opportunity to help Posey achieve its goal of establishing manufacturing capabilities in China. At the program's core is a "factory-within-a-factory" approach designed to provide a low-risk, quick and cost-effective way for a client to essentially incubate its own manufacturing operation within Eastek's pre-existing campus. During the incubation period, Eastek helped Posey navigate China's complicated business and legal landscape and put the wheels in motion to eventually establish Posey's own operation in the region.
The program's flexibility allowed Posey to choose from a range of services and to determine Eastek's level of involvement in the operation at every step of the way. In Posey's case, Eastek provided the factory space and labor, as well as support in tackling a variety of legal and licensing issues, language and cultural barriers, complex import and export procedures and local government requirements. According to Michael Keefe, vice president of operations for Posey, "We used our own equipment, and with the other services supplied by Eastek, we were able to save on costs and get up and running quickly."
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