Everyone loves a field trip!
Yesterday morning we loaded up the bus and went on a tour of a small Chinese contract manufacturing facility. 'Small' is relative. Our hosts had more than thirty injection molding units, a full tooling workshop and could turn out 2,000 finished units a day (depending on the complexity). Like we said before, as a startup, you will probably work with a smaller manufacturing facility like this one. Ten thousand units might sound like a lot, but it wouldn't keep Foxconn busy for an hour. You need to work with a manufacturer who is small enough that your business is important to him (or her!).
Factories are like people: every one is different. They offer a wide variety of services, including mold-making, injection molding, painting and silk screening, printed circuit assembly, and they may also package and ship the product, but you can't assume that they all do everything. You have to find a factory that is skilled in the processes you need, and its best if they have experience making the kind of product you want (e.g., toys, earbuds, smoke detectors, etc.).
The company gave us an estimate on the time required from tool-making (a few weeks) to first product coming off the production line (about two months from start of the project). It would also help to have someone local to check and approve a trial run of the part before full production begins (otherwise it is shipped to you, increasing the time). At this factory, the production lines run 24 hours a day in two shifts. "We Chinese work hard," the manager told us.
The injection molding facility was neat and relatively comfortable (the injection molding machines run hot, and the outside temperature was in the 90's, but it was not unbearable). Everyone seemed to be working efficiently and concentrating on their tasks: pulling the parts from the injection molding machine and scraping them with a sharp knife to remove sprue (excess plastic-- a word a day keeps the doctor away!). The noise of the machines makes playing a radio or trying to hold a conversation futile. It was the same story in the electronics room, with the solder-printing machine, pick-and-place machine, and reflow oven whirring, clanking and humming while the workers concentrated on inspecting the parts as they rolled off the line.
I called them 'our hosts' above because the Chinese factory manager viewed working together as a relationship, not a transaction (though, of course, this isn't peculiar to China; Hi, Canadian partners!). To them this is like a joint venture: if they help your product become a success, it is their success too, because you will produce more and give them more work. They might arrange favorable payment terms, extend credit, or even invest in your company.
Now, some startups might be inclined to view the relationship as adversarial - every penny the factory makes is a penny that's not in your pocket. We think that this is a mistake. You can strike a deal that works for you without alienating anyone. Your factory owner can help you or hurt you, so it's best to establish a relationship where the factory sees itself as part of your team.