Indian Toy Manufacturing - 5 Ways To Get The Best Out Of Your Factories
India's toy manufacturing sector is fast growing right now, with most of the world's largest toy companies having set up manufacturing of some kind and to some extent in India. Hasbro and Spin Master have publicly stated that they plan to have no more than 50% of their manufacturing outside China in the near future, and both Vietnam and India are already major beneficiaries of this strategic sourcing shift.
We have extensive experience of helping clients to find manufacturing for toys within India. As such, we have learnt from hard experience there are a number of things which are different about India's business culture and as such a different approach can help to ensure smooth running, cost effective sourcing and reliable supply:
On site inspections - we strongly recommend that anyone sourcing toys from India plans to have staff on site in the factory, at least around the time of peak production, and at the very least companies should expect to do full exit inspections on site before shipping goods. This will help to ensure any special requirements like product labelling or packing off are fully adhered to.
Pricing negotiations - in India, it is normally expected that there should be some negotiation over pricing. Some of our factory partners have been left very confused when clients asked them to quote, and when they did quote the clients informed them that they had no further interest because the pricing was too high. This lack of willingness to engage and discuss price can be taken by the factory as a sign of a client not being serious, which in turn can switch off the factory. In China where there are so many toy factories and the customers has a big choice, this approach may be effective, but in India where the number of vendors operating to export certified levels are limited it can be a big mistake to switch off a factory so quickly.
Don't trailblaze unless you really have to - India does not yet have the decades of toy production expertise across the board like China has. As such, many projects and products will require toy factories in India to do things for the first time. This is rarely a recipe for smooth running - new projects take longer, encounter more problems, delays and pricing impacts. We recommend to our clients to allocate products to India where similar products have already been developed and manufactured successfully multiple times already. This cuts down on a hard learning curve. This is not to say that new things can't be done in India, they absolutely can, and Indian toy factories tend to have fairly advanced engineering skills, but we prefer not to take our clients on a costly learning journey with a factory unless it is really necessary, we prefer to recommend tried and trusted suppliers as far as is possible.
Leave a little extra time in the schedule - when working with a new supplier (in any location) we would always recommend fixing a schedule which has some 'wriggle room' as you get used to the way of working of the new supplier. By allowing some extra weeks in the schedule you reduce the potential for negative impacts such as retailer fines for late shipment. Over time you should be able to remove this, but we recommend it is more prudent to allow a little longer in the beginning.
Identify the best Indian toy factories to work with - this may seem obvious, but one observation we can share is that sourcing teams are often under resourced and under pressure. The tendency to select the first vendor they come across is one to be avoided. Like with entering any new area or market, it can take time to get to know the factory capabilities and the people working for the factories. It is normal to speak to a number of different but highly rated and fully experienced toy factories in India before placing orders. If in doubt, please feel free to get in touch - it's our business to help toy companies find the best toy factories available in India. We are frank and open about the benefits and challenges. Genuine FOB cost savings are available from India right now, but this is a different country and a different culture, and so a bespoke approach is needed for effective sourcing.
Our company introduced 5 out of 10 of the world's biggest toy companies to India for toy manufacturing. We work with factories who can produce all of the following types of toys: infant/preschool, collectable and action figures (with playsets), dolls, compounds, games & puzzles, ride-ons and more. For more information, please feel free to get in touch.