This week on Best in Manufacturing, how to protect your IP in ASEAN countries, what you can do to fight Trump's tariffs on Chinese products, the technological changes to the garment industry, and more!

Best In Manufacturing – July 1, 2018

Each Sunday, we publish a list of top articles and other content related to manufacturing in areas like quality control, product development, supply chain management, sourcing, auditing and law.

1. Protecting your IP and design rights in ASEAN countries



IP theft is nothing new to southeast Asian manufacturing. The Organization for Economic Co-operation and Development (OECD) estimates that counterfeit goods account for 2.5 percent of total global trade—US$461 billion. 

To limit these numbers, companies must obtain an industrial design right. This will protect any design that gives them a competitive edge due to its aesthetic appeal. Designs can come in many forms, including 3D shapes like the Coca Cola bottle or 2D images like a computer icon.

The tricky aspect of design rights in ASEAN territories is the need to obtain a separate right in every country the company plans on doing business in. These rights are territorial, and the process of obtaining one differs in each of the ten ASEAN countries.

The design also needs to meet two main qualifications: it must be novel, and it must be applied industrially. And businesses must do a back-check to ensure no other design rights match their own. 

How to enforce your industrial design right

If you’re thinking that obtaining a single piece of paper seems too easy, you’re right. The tricky part about protecting your design isn’t registering it, but enforcing its exclusivity.

Most ASEAN countries don’t conduct substantive examinations. Competitors challenging your design right will likely claim that your design doesn’t meet certain requirements. They’ll find any technicality in the document that gives them the right to copy your design, so be thorough and detailed when you first register it.

If you do find other parties using or applying your design, there are several approaches to dealing with this infringement. The first is to issue a cease and desist letter (C&D). These can halt immediate production and serve as documentation if the matter proceeds to a lawsuit.

The second approach is mediation. Get the involved parties to a table and work out the issue. In countries like Vietnam and Thailand, administrative actions are also cost-effective and time-efficient options.

To read more about industrial design rights in ASEAN countries, read the link below:

Design rights protection in south east Asia - SME Helpdesk, ASEAN Briefing

2. 6 Steps to building a relationship with your manufacturer

Finding the right manufacturer is an important step on the road to producing goods that meet your requirements. And once you’ve found that manufacturer, maintaining a healthy relationship with them will help you ensure they continue to meet your standards.

Hadari Oshri, CEO of a fashion tech company called, recommends these strategies from her 15 years in the business:

Proximity Networking: Sometimes the key to getting business done is doing it in person. If your unknown company is having trouble setting up a meeting with a particular manufacturer, go out and make it happen. Individual manufacturers often frequent the same restaurants, attend the same social events and stay in the same hotels. Talk to locals to try to find out where and when you might be able to “bump into” them.

Connect with them personally: Build a basic personal relationship with your manufacturers. If they’re Chinese, something as simple as a WeChat text on major holidays can go a long way.

Watch for competition: Make sure you’re not using the same manufacturer as your competitor. This can be dangerous territory, and it’s best to ask potential manufacturers what other companies they supply to . Also, be sure to ask your chosen manufacturer to sign a nondisclosure agreement (NDA).

What to do once you’ve found a manufacturer

Play hard to get: Getting the best pricing requires a bit of strategy. If they email you with an initial offer, stay silent for three or four days and let them know you’re weighing other offers (even if you aren’t).

Make the first order matter: Once you’re ready to dive in, place the first order quickly. Instant business is always a good relationship-starter. Wait until the second or third order to start negotiating better terms or bigger orders.

Visit the factory for during your first production run: If you’re skeptical about the quality of your product, fly out to the manufacturer to monitor your first order. Either surprise them or plan it in advance, but make it clear that you have expectations they need to meet.

These steps will put you on the right track to finding the right manufacturer and maintaining a strong, genuine relationship with them. For more details, read the article below.

6 ways to manufacture long-lasting relationships with manufacturers - Hadari Oshri, Forbes

3. Fighting the impending U.S.-China trade war

U.S. President Trump’s announcement last week imposes tariffs on nearly $50 billion worth of Chinese imports. The primary targets are machinery and industrial parts in the very industries and technologies that Chinese officials seeks to become a global lead in with the Made in China 2025 initiative.

In direct retaliation, China imposed tariffs on U.S. exports like salmon, soybeans, orange juice and whiskey. The total worth of the exports affected by the extra tariffs is—you guessed it—about $50 billion. An eye for an eye. An import dollar for an import dollar.

The date these tariffs will take effect is set for July 6th. But the constant back-and-forth from both sides leaves it unclear whether that date will stand.

U.S. companies can work around the tariffs

While these policies may seem final, there’s a work-around that could help avoid the worst of the tariffs.

For U.S. tariffs, U.S. companies will likely have the power to ask for what’s called an exclusion request. This request, if granted, removes the specific product from the dreaded tariff list. In the past few months alone, the U.S. Department of Commerce has received nearly 20,000 exclusion requests. These companies know the implications of these tariffs and are doing everything they can to avoid them.20180701 body_2

A company needs to submit a separate exclusion request for each product it wants excluded. Each request typically must contain the following:

  1. Description of the product based on physical characteristics
  2. The basis for requesting an exclusion
  3. The names and locations of U.S. and foreign producers of the product
  4. Total U.S. consumption and production of the product
  5. Discussion of why a similar U.S.-made product won’t suffice
  6. A compelling argument for why your company deserves the exclusion

The process is not easy, and the immense volume of requests will likely cause time-delays. But avoiding a 25 percent tariff might just be worth the hassle. To read more about how U.S. companies can avoid the tariffs, read the article below.

China/U.S. tariffs and how to fight back—Adams Lee, China Law Blog

4. High-tech changes to the garment industry: more machines, fewer people

The textile industry often evokes images of roomfuls of southeast Asian women working away at sewing machines. But the reality is changing. As technology is progressing, robots are beginning to replace humans on the factory floor. The 43 million people employed in the garment, textile and footwear industries—three quarters of whom are women—are seeing their jobs disappear.

The evolution of the industry is a direct response to the evolution of the consumer. People are demanding faster deliveries and customized orders. In response to these demands, Amazon outlined its plans for an on-demand apparel manufacturing system that can customize orders and optimize production.

Other futuristic Amazon inventions include a “blended-reality” mirror that can virtually dress an online shopper and predicting fashion trends with artificial intelligence. It might not be long before “made in” labels become “Made by Amazon” labels.

Though these changes may ease consumers’ buying experience in relatively subtle ways, the effects to the producer will be dramatic.

The producer side of a tech-infused garment industry

In many industries, entrance into the fourth industrial revolution means regulating technology. But players in the garment industry have more to consider. They need to keep in mind the 43 million workers currently employed in garment production. They need to adopt a more human-centric, globally conscious approach to business.

The transition from manual to modern manufacturing will need a certain amount of re-education. Machines don’t run entirely on their own, and these factories will need people who understand machine operation and maintenance.

Alongside this company-level change needs to be government-level change. Leaders need to realize that abundant, cheap labor is no longer an absolute advantage in the garment industry. They need to respond to this change with the necessary trade agreements and policies that will protect their workers.

Changes in technology can be monumental in any industry. But these changes in the garment industry have the potential to affect 43 million people.

To read more about the technology changes happening in the garment industry, read the article below:

The garment industry’s technology challenge - Heshika Deegahawathura, Project Syndicate

5. Tracking down your supply chain with the newest gadgets

We live in a world where we can expect real-time location tracking of our food deliveries. Where is my pizza, and exactly how many minutes until it arrives at my door?

Yet for some reason, that level of sophisticated trac20180701 body_1king still hasn’t permeated industrial supply chains. Multi-million-dollar shipments leave the loading dock, and we often can only hope they arrive on time.

Supply chain tracking is understandably complicated. Large shipments can remain in process or transit for a few weeks or even months, making them difficult to keep track of. On top of this lies the complication of moving these shipments across borders and through inspections—lots of red tape and tedious paperwork.  

Thankfully, recent technology is turning this around. Supply chain tracking is catching up to the level of consumer tracking thanks to the IoT.

Using the IoT to improve supply chain tracking

Supply chain IoT involves tracking systems that monitor real-time location and condition of goods. You can monitor the data from a remote location, and managers can ensure their shipments are on-time and in good condition.

These trackers are efficient and smart, meaning they do most of the work. An international pharmaceutical company recently detected a shipment that was set to the wrong temperature, thanks to their trackers. They detected the error fast enough to prevent product damage.

This new technology also allows companies to bring data-driven manufacturing strategies and big data analytics to their supply chain. They can compare recent numbers to historical data and make decisions on the quality levels of different carriers—improving shipment times and reducing waste.

Purchasing high-quality trackers may seem like a big investment, but it could pay off. The ability to know exactly where your shipment is or even what temperature it’s contained at, can revolutionize supply chain management.

Read the article below to learn more about the technology of supply chain tracking:

Is your supply chain lost on the road to nowhere? - Dagny Dukach, Material & Handling Logistics

We’re constantly scanning the web for top manufacturing stories and news. If you’d like to submit an article for consideration for our weekly Best in Manufacturing, send us a message and let us know.

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