In this episode, we have our guest Francois Jaffres from Noviland, who discusses what manufacturers need to know about working with international suppliers. He also shares his insights into why the transactional approach does not work while collaborating with international suppliers. Finally, he shared what other options companies might have to access international supplier markets without having pre-existing relationships in these countries.
- [0:18] Intro
- [2:42] Personal journey and current focus
- [3:16] Perspective on growth
- [5:01] How to work with international suppliers?
- [7:22] Building international supplier relationships
- [16:53] How to work with an external 3PL?
- [19:58] The business model of sourcing marketplaces
- [25:46] How to build QC processes of a company serving multiple industries?
- [28:07] The fulfillment processes of a sourcing marketplace
- [31:28] Closing thoughts
- [33:40] Outro
- So just general culture and business culture, two of the most important things when handling international business, and being able to once you have those two locked down, you’re able to really start to establish those relationships with much fewer barriers.
- You may struggle with just understanding when someone says, for example, no in China, or they may just have a long maybe, which essentially just means a no, and it has to do with sort of a saving face culture.I would say the number one thing is really to understand the culture, too. It about understandiing how these vendors negotiate.
- You want to get a 5% reduction, and they say yes, we’ll give you the 5% reduction, what they’re not telling you is that 5% is coming from somewhere, it doesn’t magically go away from there, they’re not usually working with large enough margins to even give you that five or 10% discount. So they may be cutting corners, they may be using a cheaper material from a different source, they may be not assigning some of their engineers for quality assurance, throughout manufacturing, there are so many different ways that they can actually cut out this 5%.
- When you approach a factory with every single question answered of theirs, and they can quote that immediately, you leave little to no room for error because you gave them everything upfront.
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Francois is the Director of Business Development at Noviland, a supply chain management company disrupting the traditional international supply chain through technology and customer-centric innovations. With a degree in Industrial Engineering from West Virginia University, he’s helped develop streamlined processes for international sourcing & logistics management by listening to what businesses and importers need & implementing them into the core of Noviland services.
Francois Jaffres 0:00
It is so costly to switch vendors after you’ve gone through the vetting after you’ve gone through the relationship building, and that will affect your bottom line, whether that has to do with quality, whether that has to do with price negotiations starting a great relationship and maintaining.
Growing a business requires a holistic approach that extends beyond sales and marketing. This approach needs alignment among people, processes, and technologies. So if you’re a business owner, operations, or finance leader looking to learn growth strategies from your peers and competitors, you’re tuned into the right podcast. Welcome to the WBS podcast, where scalable growth using business systems is our number one priority. Now, here is your host, Sam Gupta.
Sam Gupta 0:55
Hey everyone, welcome back to another episode of The WBS podcast. I’m Sam Gupta, your host and principal consultant at digital transformation consulting firm ElevatIQ.
Do you care for your vendor relationships? Well, your vendor relationships are as important as your customer relationships. If you’re dealing with international vendors such as China, Mexico, or India. Your relationship with vendors and understanding of their culture could impact your bottom line and growth. In today’s episode, we have our guests Francois Jeffrey from Noviland, who discusses what manufacturers need to know about working with international suppliers. He also shares his insights into why the transactional approach does not work while collaborating with international suppliers. Finally, he shared what other options companies might have to access international supplier markets without having pre-existing relationships in these countries. Let me introduce Francois to you.
Francois is the Director of Business Development at Noviland, a supply chain management company disrupting the traditional international supply chain through technology and customer-centric innovations, with a degree in Industrial Engineering from West Virginia University. He has helped develop streamlined processes for international sourcing and logistics management by listening to what businesses and importers need and implementing them into the core of Noviland. Having worked with 1000s of companies in discussing and streamlining your supply chain, Francois is an entrepreneur at heart and has a passion for speaking with every single Amazon FBA seller that joins the Noviland community. With that, let’s get to the conversation. Hey, Francois, welcome to the show.
Francois Jaffres 2:40
Hey, Sam, thank you for having me.
Sam Gupta 2:42
Of course, just to kick things off, do you want to start with your personal story and your current focus?
Francois Jaffres 2:47
Yeah, just a little bit on my background. So I have an industrial engineering background. So a lot of it has to do with the supply chain. And I sort of just stumbled upon this role here at Noviland as Director of Business Development.
And a lot of it really just has to do with creating processes, right, and making sure that anything that we’re building here is something that is scalable and that we are going to be able to target for growth. So I’m a graduate of West Virginia University. And right now, I reside here in Atlanta at one of our offices.
Sam Gupta 3:16
So one of the standard questions that we have for every single guest. And obviously, we are going to dig deeper into your background. And we are going to be talking about how to explore the supply chain internationally, how to acquire vendors, how to vet the vendors.
That is the topic that we are going to be discussing today. But before we do that, we have a little bit of ritual here. So the question that we have for you is, what is your perspective on growth? What does business growth mean to you?
Francois Jaffres 3:43
Yeah, growth is it’s a very interesting topic, right? And it’s something that has kind of evolved over the years, and everyone’s looking for that unicorn idea, right, whether that’s what SAAS companies are, for the products that just take off with, let’s say, some form of viral marketing.
But I think growth is something that I’ve had to learn very much, starting out with Noviland as being part of the founding five, I guess. And now we have over 30 employees globally. But when it comes to growth, it’s really I think it comes at a leadership level. And the only true way that you can grow any company, whether that is an Amazon business, or it’s to continue growing, let’s say you know, a fortune 500, it really has to come at leadership and making sure that any values that that leadership really has instilled in them, they’re able to relate to the rest of their employees and their team members.
Ultimately, if you have managers that really conflict with any growth strategies from, let’s say, the C-level executives, that’s where you will find your bottleneck. And that’s something that you know. We’ve had to really incorporate from going from just the first five people to 10 people, 20 people, and on our way to 50 people. So it’s really important that I think every step of the way you’re able to instill those values at a management level. And then trickle those down.
Sam Gupta 5:01
Yeah, I completely agree. And this is a very interesting perspective that I have personally not heard before in terms of internal communication and communicating your values. And that is definitely going to be a bottleneck to the growth.
So for today’s topic, we are going to talk about suppliers. So let’s say if I’m the manufacturing executive, and I have never done business internationally, maybe Mexico or maybe China, and I’m exploring this for the first time, what are three or five things that I should know about working with international suppliers?
Francois Jaffres 5:34
Yeah, and I guess it’s heavily dependent on where you’re doing business. But number one is always understanding the culture. So, for example, we work with our overseas offices in China, and the majority of our customers and users are based in the US, or they may be based in Australia or the UK, and they have significantly different cultures, whether that’s personal or business with China.
So a lot of times, you may struggle with just understanding when someone says, For example, no in China, or they may, you know, just have a long maybe, which essentially just means a no, and it has to do with sort of a saving face culture. Yeah. So that’s, that’s one thing, I would say the number one thing is really to understand the culture, too. It understands how they negotiate.
I guess that sort of ties into the business culture, right, everyone is trying to get the best price, but it’s all about how that’s relayed, right. A lot of times, I tend to hear, I want the best product, best quality at the best price. I think that’s every procurement agent’s or distribution agent’s dream. It’s really just getting the lowest price for the best quality product.
Francois Jaffres 6:38
But you have to know how to relay that over to the manufacturers, let’s say, you know, if you are a US business, relaying that to China, and not just telling them, I need a very good quality product, and I need it for 30 cents, that’s very transactional, it’s really telling them, hey, these are the key quality indicators that I’m looking for. And this is sort of what I would find acceptable.
Are you able to fulfill this around this target price, and that’s where I think he starts to open a conversation, rather than just telling them exactly how to do their job? Almost is how they come across. So I guess just general culture and business culture, two of the most important things when handling international business, and being able to once you have those two locked down, you’re able to really start to establish those relationships with much fewer barriers.
Sam Gupta 7:22
Another very interesting perspective, that culture is something that I have not heard a lot in terms of establishing these relationships. This is great. But let’s say if I’m the manufacturing executive here in North America, right, and I have no context whatsoever in either China or Mexico. So how can I start on my journey exploring the international supplier relationship?
Francois Jaffres 7:46
Well, I guess the easiest answer to that question is to visit it is to go to Mexico, it is to go to China, it is to go to India, wherever it is, you plan to handle these relationships. And it’s to see how they interact. So, for example, prior to working here at Noviland, I did not fully understand the Chinese culture and the way that you actually manage relationships, and you manage them very effectively.
And I’m talking about not just looking towards getting a cheaper price, but making sure that you have someone that’s there in the good times and the bad times. And that’s just as important as having them there in the good times. But it’s actually going over there and taking them out, and maybe having a nice dinner, having a good amount of drinks.
And I’m talking about a good amount of drinks together and bonding. Yeah, and you’ll see how they sort of interact with each other, you’ll see how they interact with you, you’ll open up more opportunities to be able to build together rather than, again, just being transactional, which a lot of times this is started to boil down to, it’s very black or white, I need this, if you don’t have this, I’m going to go somewhere else. Sometimes it takes a little bit of exploring. Just find out what makes them tick. And they’ll find out what makes you tick.
Francois Jaffres 8:53
And once you’re able to sort of drop some of those defenses down and be a little bit more vulnerable. I think that’s where you can launch a very, very lucrative relationship and a long-term relationship, which I think is everyone that’s listening understands. It is so costly to switch vendors after you’ve gone through the vetting after you’ve gone through the relationship building.
And that will affect your bottom line, whether that has to do with quality, whether that has to do with price negotiations, starting a great relationship, and maintaining that it’s far more lucrative to everyone on both sides than it is to have to just find a new supplier and keep that transactional.
Sam Gupta 9:29
Okay, so before we go to the next question, obviously, I need to understand your business a little bit better, who you help, who your customers are, what your business model is, and the value that you are providing so that we can position this conversation in the right direction. So do you want to touch on your business model, who you help, and what kind of value you provide to them?
Francois Jaffres 9:46
Yeah, yeah, definitely. So we started about five years ago, and we started as a very traditional sourcing agency. We aim to work with another medium- to large-sized businesses and help them source any products effectively from overseas. We didn’t have the technology back then that we have today that was released back in 2018. So what will sort of start the launch in 2018?
So when we launched that, we opened up this new opportunity to not just medium to large-sized businesses and enterprises, but also ecommerce sellers, which is one of the largest growing industries. When we got our first few signups, we noticed that they were ecommerce sellers, and they were struggling to find suppliers overseas.
A big reason for it was because they didn’t understand the culture. And in one case, they may be using open marketplaces that are created today, where any supplier can go sign up. And that also means that there are the good apples as well as the bad apples. So we really aim to simplify and mitigate the risks for businesses that want to handle overseas procurement and purchasing and do this all in one centralized tool to make it really easy for any company of any size to do this.
And so this is why I focus so much on relationship building rather than just a transaction. Because a lot of times you approach the marketplaces with a very consumer mindset where it has to be this price, the specifications, not necessarily it has to maintain this quality level pieces, certain quality control measures, and I’d like to keep it around this price to keep good margins, and everyone stays happy.
Francois Jaffres 11:19
So when we first started, we just had one dedicated person to each account. And we realized that that model just simply doesn’t work. It’s something that has been traditionally done across the board. And companies worldwide have agents that do that specifically for them.
The issue is that it’s not scalable. And so when I’m talking about something that’s scalable and is able to fill that role of, let’s say, a sourcing agent, it really has a team, a team that’s dedicated to working with our clients to maintain and create every project as a successful one. So instead of having one agent, we break apart all of the different positions.
Francois Jaffres 11:55
So you have the product specialists, factory specialists, they interact with the clients, and the factories because they understand both cultures, they’re able to negotiate those successfully, you have an order manager that of course overseas logistics, handles, export, and import documentation, customs clearance, all the boring stuff that no one really worries about.
After you’ve already purchased the product, the quality control Inspector, of course, works with our customers to make sure that we meet all the quality requirements. Then an account manager, one of the most important roles actually because they are the ones that make sure that all the projects are streamlined and that all of our customers and users are happy. And so we had to break apart this business model, simply because that single person that’s managing all of those different roles and wearing all of those different hats just doesn’t work.
So we have a great back end and front end of our platform that helps streamline and really helps us, I guess, teamwork together. And that way, everyone can stay on the same page at all times during every project.
Sam Gupta 12:57
Okay, so, in terms of the market positioning, how do you like to position yourself? Are you going to be more of the Ariba or Coupa of the world in terms of the marketplace? So in my mind, what Ariba and Coupa are going to do is number one. They are going to help in finding new suppliers. Let’s say if I need help in a specific part category or the product category, I can go to rebuy, and I can find new suppliers who might be supplying those, or I can interact with the existing suppliers. And my compromise if I need to work with Coupa is going to be I need to pay per transaction. Is that how you guys work as well? Or Is that your position in the market going to be different?
Francois Jaffres 13:34
It’s a bit different. It’s a bit unique. And it’s very much a white-glove service for international purchasing and logistics. And we’ve gone more downstream into warehousing and fulfillment, which actually is something that I think is top of every CFO’s mind that’s handling any type of product since Coronavirus.
Yeah, I think third-party logistics centers are something that we’re gonna see an increase in the next five to 10 years dramatically. But so we work with a lot of our clients one on one, first of all, they know who it is they’re working with, they know that they’re working with an entire team. And we essentially are their supplier for all of the products.
Francois Jaffres 14:14
So in our contracts, it’s even written out that we are the ones that handle any returns or repairs or replacements for any defects or non-conformities, which of course affects the bottom line, anything that you have to do yourself, whether that is assigning a purchasing manager or procurement officer to start working with all the different vendors and noticing that some of them are dropping off in quality and that you have to reach out to them.
And then there’s the barrier of the time difference, right? So rather than having to reach out to them at 8 pm or 9 pm and worrying about when is that next shipment going to arrive. And of course, you’re getting those reports from your warehousing team, and you start to see this trickle-down effect of access toll charges actually starting to be charged, and you start realizing, Hey, all these last-minute charges are really adding up. This is affecting our bottom line. At the end of the day, this is eating into our margins, eating into our profits.
Francois Jaffres 15:05
So we handle everything very proactively as a team. And this is why it’s more of a white-glove service where we can actually monitor the order managers can monitor all the logistics and shipping coordinate between both parties, the warehousing managers that are receiving and the ports and the exports. Let’s say on the China side. You have the product specialists that are making sure that when a supplier is actually telling one of our clients anything, that they’re being honest about it, and they’re upfront about any potential issues that might happen down the road.
So a lot of times, particularly a procurement officer, may report back to the executive level and just say that the factory or the manufacturer mentioned they could make these changes. But one question that I always see left unanswered is.
Francois Jaffres 15:54
And let’s say the negotiations go wrong. Or they go right, I guess, for the face value, and you want to get a 5% reduction, and the factory just they turn around, they say yes, we’ll give you the 5% reduction, what they’re not telling you is that 5% is coming from somewhere, it doesn’t magically go away from there, they’re not usually working with large enough margins to even give you that five or 10% discount.
So they may be cutting corners, they may be using a cheaper material from a different source, they may be not assigning some of their engineers for quality assurance, throughout manufacturing, there are so many different ways that they can actually cut out this 5%. So it’s our job to actually make sure. Hey, is this factory just saying that they could do 5%? Or why are they saying that they could go down by 5%? Those are questions that my team really makes sure are answered ahead of time. And I think it’s top of mind for every C-level exec out there. It’s understanding the nitty-gritty of it, not just taking it at face value.
Sam Gupta 16:53
Okay, interesting. So I’m still not sure if I understand the order of engagement completely. So let’s see if I’m the manufacturing executive. And I have some problems in sourcing the suppliers internationally. So what is going to be the order of operations here? So am I coming to you that I need to source these part number one, part number two, part number three, part number four, part number five? Or am I going to be provided a portal where I can search? If you already have that? Or am I sending you the list? So tell me, does all the engagement works from the customer perspective? And what are the different industries that are going to be the right fit for you?
Francois Jaffres 17:27
Yeah, we could just use this as a quick example. We have a manufacturer here in the US, down in Florida, actually. And they manufacture a lot of products for the Department of Defense. And whenever they’re looking for a new part or piece, of course, the purchasing manager there gathers all the specifications from their team and their engineering team, they put together a package, right, the tech pack that usually has all the specs and the materials that need to be used dimensions and the certifications that are required a bit of project scope. They understand the budget. They know how much around how much they want to purchase that item.
Francois Jaffres 17:59
Of course, they know how many they need for the project and the duration of the project, let’s say 1000 a year for the next five years. And they’ll take all of these requirements. They’ll upload it into the portal, so they just go to Noviland.com, and then they upload as a new RFP or new request for a quote from their product specialist team review it, they make sure that we have all the specifications that factories in our network would need in order to quote it effectively.
So they are experts on that front. But if you leave out a type of material, or potentially, you know, thickness or length, they’ll call that out. And they’ll let you know. Our biggest goal here is to make sure that everyone is prepared, so setting you up for success when you’re sourcing. And when you approach a factory with every single question answered of theirs, and they can quote that immediately, you leave little to no room for error because you gave them everything upfront.
Francois Jaffres 18:46
And so this manufacturer and Florida that got us all these requirements, we get them back a quote, everything is done right in the portal, they can see the quote, they can add the product to a cart very similar to shopping on Amazon, for example. Yeah. And immediately, they’ll see two things, they’ll see the import duties, and they’ll see the shipping costs that are associated with it.
So that’s right there, they can take that back to their team and immediately say, hey, we don’t have to worry about the customs. We don’t have to worry about finding a freight forwarder that can transport these hazardous goods. Let’s just take, for example, because dangerous goods were very popular in 2020, because of hand sanitizer from there. Their team is able to quickly make a decision. They don’t have to sit back and try to figure out all these moving pieces. They immediately know. okay, yes, that’s within our budget.
Francois Jaffres 19:31
That is the target price that we’re looking for. It meets all the specifications has the proper certifications. They can order samples in the portal. They can place the order in the portal. And of course, if it comes down to payment terms, it just varies. And that’s that that all varies on relationships. Most companies started out with 30% upfront 70% prior to shipping, but after they received the quality control report, but again, it just all depends on who you are, what background you have. What’s the reliability behind it.
Sam Gupta 19:58
Yeah, so I usually have a little bit more details here. Because when we talk about, you know, going from, let’s say, aerospace manufacturer to ecommerce shops, and the number of skills that you might need to maintain, and the amount, number of vendors that you may be sourcing from, it could be enormous.
So I don’t know if you have a database of every single vendor out there and the SKUs out there. So I’m still not sure what is your order of operations in terms of whether you source the vendors where and list all of the SKUs? Or are you going to first take the RFP and going to look at them and see if you have supported those skills in the past? And if we need to do any sort of sourcing for additional parts that they might need? So tell me where the relationship starts in your business? Is it from the vendor’s perspective? Or is it from the customer’s perspective?
Francois Jaffres 20:43
Yeah, so it would be the latter in the first instance. So we do have a network of over 4000 factories, we understand their machinery, their background, the products that they’ve created in the past customers that they have certifications that they hold. So we understand the full background of all these different factors or networking.
It really spans all the way from, and I kid you not automated fully automated garage systems, we’re actually helping provide one in the state of Georgia, one of the first ones in the state of Georgia, fully automated parking garage system, all the way to building materials for construction companies to parts and pieces that need to be ordered at, you know, at scale, or at larger volumes by manufacturers in the US, e-commerce sellers that are looking for consumer packaged goods with minor customizations, they may require some molding or tooling.
Francois Jaffres 21:29
So it’s not necessarily a certain niche that we take on. And we say we can’t serve as anyone else. Now, we don’t do things as we discovered very early on that we weren’t able to supply drones, because actually, the Department of Defense here in the US has a very tight regulation on drone imports from China, that’s something that we just don’t touch, we don’t touch anything with it can’t source Nike brand products from China and just order them overseas, we don’t touch any counterfeits or anything of that nature, anything that’s custom or needs an OEM factory and needs to be purchased at scale.
It’s something that we’re able to service. And so whether that means those are parts and pieces for car manufacturing, or if those are pots and pans that you need to order for your Amazon business, you just submit the RFQ into the portal.
And within just a few days, we’re able to tell you yes, we have factories in our network that are able to service you know, we don’t have factories that are networked currently, but we’re in the process of vetting a few, or we could go vet a few or third, it’s just Hey, this is not something that’s within our wheelhouse, but we can try to refer you to somewhere else, it has to be very limited in scope, but also open enough to where we could take on any of the RFPs. We can’t necessarily service all of them. We have to be honest about that.
Sam Gupta 22:44
Okay, so in terms of your marketplace, you are obviously networking with these 4000 factories. There’s no question about that. But you did mention that they don’t have to worry about the freight duties. They don’t have to worry about quality control.
So are you networking with these vendors as well, where you are doing the rate shopping? Are you working with a third party? How are you finding these rates? Is this your internal capability? external capability?
Francois Jaffres 23:07
And so, this is actually very much part of our operational business development team. Though, when it comes to shipping and logistics, we have multiple partners, I’m talking about over a dozen partners that our operations team overseas has developed these great relationships with, and our tech team has been able to create algorithms that can assign based on the lane that they’re being transported into whether it’s going to the east coast to the west coast, what type of warehouse, is it an Amazon warehouse doesn’t have to have Amazon labels?
Or is it going to a residential address? Our system automatically detects, based on where it’s going, which shipping carrier in our network will be best suited for it and the quotes that are updated. I believe they’re updated weekly or bi-weekly. I would have to double-check with my team. But that’s all done in the system that has a very big tech hand behind it, where the algorithms help determine which partners we’re going to be using for shipping and logistics when it comes to QC.
Francois Jaffres 24:00
It’s something that we do handle in-house. So we do have a quality control inspection team. I believe it’s called the ANSI ASQZ point one level two sampling plan. I want to say it’s a long name, but it’s a fairly international standard. It’s something that we require that each of the orders that are going at or that have been manufactured are able to go through that process and are accepted, I guess in QC terms.
And we have to do this for every order mainly because one where the supplier, so anything that happens down the road is going to fall on us too. It’s something that we want to make sure that every business is set up for success no matter what the product is. So again, if that’s a partner piece or manufacturer if that’s a consumer packaged good that you’re selling, and you’re relying on good reviews on, for example, you rely on that they’re going to sell out quickly so you can increase that sales velocity that all impacts the bottom line for any company, again, parts or pieces or you’re selling the goods for retail to making sure that they’re great at the source mainly because the way that pricing model works is that working completely free to use on the platform.
Francois Jaffres 25:01
Anytime that you’re checking out that product, FOB pricing already includes a small, no VLAN service fee in it. And so of course, if we quoted, you order it in the order at one time, it’s a, we make some money on that order. But one of our goals is really to help you scale that up. So if you’re starting off with, let’s say, 1000 pieces, how can we help you scale up to 2000 or 5000 pieces?
If that means we have to work with our manufacturers to get you better long-term pricing strategies and models, then that’s something that we’ll have to do if that means we have to figure out how we can optimize the container to fit more items in there. So you save money, that’s something we have to do. At the end of the day, it’s making sure that the businesses that we work with are continuously growing and that we can be that helping hand or that overseas helping hand for them.
Sam Gupta 25:46
Okay, so I want to talk a little bit more about the B2C aspect. So you did mention that you do a lot of QC, but when I look at QC, for each industry, the QC requirements are gonna be different. In fact, they might require the certificate of conformance, or maybe if they are in the electronics industry, they might require, let’s say, the certification of origin, because these manufacturers are the distributors might not want to take responsibility for doing the QC, they are relying on their suppliers.
So this could be a massive undertaking. And then I don’t know how your warehouse facility is. I mean, do you have a separate warehouse for every industry that you are serving in to make sure that you are not going to be mixing the quality practices for this different micro-industry? So tell me a little bit more about the QC processes for different industries that you are serving?
Francois Jaffres 26:36
Yeah, that’s a great question. So based on the current QC that we perform, it’s more of the higher level QC, it’s not materials testing, or ingredient testing anything that requires a lab, we will outsource, and we can utilize companies like SG&A, for example, just to make sure that we have all the proper certifications, whether that’s per order basis, or whether that’s just the factory needs help getting a GMP certification, in order to work with any level of Fortune 500 level company here, we may work with that factory to actually help them gather all the documents that they need and get those in order.
And we’re no stranger to that we’ve actually had to help a few factories move from China to Vietnam back in last year, a little bit over a year ago, once the US imposed, I believe it was a 260 or 270%, anti-dumping countervailing tariff on Chinese cabinet imports.
Francois Jaffres 27:25
So we had to help them transition into Vietnam, make sure that they had an ethical and legal upstream and downstream supply chain and ensure that they would be fully compliant. And so that’s something that we’re no stranger to. We fully understand all the compliance measures that every company has. The best part about it is every company tends to understand that the compliance measures that they need.
And so as long as they tell us these ahead of time, we’re able to find the right factory for them. And we’re able to coordinate with the right labs for the testing of QC, for example, basic things like obtaining SDS is or MSDA reports, that’s something simple, something basic. To your point, I guess anything that’s a little bit more than just the surface value of QC. We will outsource to a third party like SG&A.
Sam Gupta 28:07
Okay, and in terms of the ownership, so typically, do you ship these products in your warehouse, and then you ship it out to your customers, or is it when they’re directly shipping from their warehouse to customers’ warehouse? Tell me a little bit more from the warehousing perspective, how you are managing the fulfillment of the orders that you are taking from your customer?
Francois Jaffres 28:27
Yeah, I think it very much varies from industry to industry. So let’s just take, for example, a construction company because we do work with a lot of general contractors that ask their subcontractors to work with us that is very much a per-project basis. So let’s say that we are fulfilling two containers of doors, one container of cabinetry, half a container of countertops, and we understand the delivery schedule in those instances if we could get those products manufactured in time.
And let’s just take, for example, the project is here in Atlanta, where I am will utilize one of our Atlanta warehouses, get everything shipped in early and then just ship everything FTL to the project site, likely on a flatbed truck, make sure that it could go on to any of the lifts that they have at the project site to get it to the right level.
Francois Jaffres 29:11
And then we’ll work with our customers to make sure that everything is sorted out appropriately so that the containers are maximized or optimized for the space usage that the trailers that are delivering it are able to either unload them or load them onto a lift if they need to make sure that the manufacturers that are producing the item are protecting the items for ocean transport, as well as the handling at our warehouse into the project site. And so that’s just for construction. If it’s for e-commerce, or any online brands, or even retailers, it’s a lot simpler, actually.
Francois Jaffres 29:44
So you have the products you make sure that they pass the quality control report, get that over to the customer, the user, and from there that goes through our new VLAN Logistics Center in China goes through our secondary inspection make sure that everything is packaged appropriately that it is going to withstand any of the ocean transport Handling by customs, make sure that it has all the labels on it, whether that’s going again to an FBA fulfillment center or to, let’s say, one of the warehouses that we have, or to one of our customer’s warehouses.
And so from there, we handle all the export, get everything transported to let’s just say that us and then it can either be shipped directly to a warehouse for e-commerce fulfillment could be shipped directly to one of our customers’ warehouses, which we’re no stranger to we do that very often for whatever customers out in California, if it’s coming to the east coast, one of the benefits of our shipping is that we will find the most cost-effective, or I guess, a preferred method for many of our customers.
Francois Jaffres 30:37
So whether that’s time or whether that’s cost, if it’s cost, it may be going to the west coast and then hopped on a rail sent over, and then we handle the last-mile delivery to that warehouse that they’re being delivered to if it’s time, then we might find a fast ship boat or an expedited shipping boat.
And instead of using a 40-foot container, which you know, there’s a lack of them nowadays, maybe use a 20-foot container use two of them. So we find all these different options. And when it comes to logistics, it just varies from industry to industry. Really, I guess to answer that question, in a very short form, it’s whatever’s most beneficial to our customers could be Express air could be ocean freight, and it’s whatever’s best suited for that project. So again, if it has to go through one of our logistics centers, it can hit our China Logistics Center, our US-based fulfillment, and 3PL and then be shipped to the customer. It could go directly to the customer, whatever is in their best interest.
Sam Gupta 31:28
Okay, this has been an insightful conversation. Do you have any last-minute closing thoughts, by any chance?
Francois Jaffres 31:34
I think nowadays, the biggest thing that I’ve been noticing, and that when we audit our factories, one of the biggest complaints that they have just in, in passing sort of is that the industry has really moved to more of a transactional form of communication. And it’s something that will find its tipping point or its inflection point. And that’s where I think a lot of companies will start to suffer.
I think we need to pay back more attention and put more emphasis on relationship building on making sure that your vendors are just as happy as you are and making sure that they’re working with you through the bad times and the good. So I think in closing, really just re-emphasizing and refocusing your values to make sure that it’s relationship building rather than transactional.
Sam Gupta 32:17
Okay, amazing in my personal takeaway from this conversation is going to be your vendor relationships are equally important as your customers, so care for your vendors.
Sam Gupta 32:27
All right. Thank you so much for your time. Really appreciate your insight. Thank
Sam Gupta 32:30
I can’t thank our guests enough for coming on the show for sharing their knowledge and journey. I always pick up learnings from our guests, and hopefully, you learned something new today. If you want to learn more about Francois or Noviland, head over to noviland.com. Links and more information will also be available in the show notes.
If anything in this podcast resonated with you and your business. You might want to check out our latest episodes, including the interview with Harry Moser from Reshoring Initiative, who discusses how to compute the total cost of ownership of reshoring initiatives. Also, the interview with Sarah Barnes-Humphrey from Shipz, who shares her knowledge of international supply chain and trading.
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