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Black Box Manufacturing

By

Michael Faass

|

June 17, 2019

Black box manufacturing is the ability to protect our customers and partners interests through use of our over 20 years experience and infrastructure that we have built out that allows us to provide a veil that separates product development and manufacturing taking place within China from the rest of the global supply chain and vice versa.

One of the first steps we take in our project evaluation process is to take a product’s BOM (Bill of Materials) and break it down to its most basic components.  From there we utilize our network and work directly with the most upstream vendors possible. The advantages to this strategy are clear as the vendor base we have operate mostly as sub-vendors to larger assemblers and do not have either the export license nor ability to take what they may know or gleen from our product to the outside world at large. Our experience has taught us that if you are working with an SMT vendor making PCBAs for example, that that is all they will be concerned with, that is what they are expert in, and that is all that they really want to sell and produce.  The fact that we also have the promise of future business to come, and a proven track record of business with our vendor base also gives us an amount of leverage over them that new one product startups will not have.  

An additional benefit of this is compartmentalization is that  no one vendor knows exactly what it is we are making and are only able to see the relevant documents or specs that are needed to fulfill their part of the project.  A real basic example would be our packaging manufacturer who simply makes boxes and prints artwork but has no ability nor inclination to make our entire product, much less export it should they actually know how to make it. This can be extrapolated across our entire product development and manufacturing process for metal, plastics, glass, pcba, batteries, cables, screens, motors, lights or any other type core component a product might have.  

The final aspect, and perhaps most important aspect of our black box strategy involves acting as the veil between product development and manufacturing in China and the rest of the global marketplace.  Panasia is able and willing to act as the exporter of record on all shipments we send overseas from China and as such we are able to prevent other distributors or competitors from ever being able to know where our products are coming from. A quite inexpensive and simple strategy for knocking off a product is for a potential copycat or dishonest distributor to search import/export records in the US and Europe which are a matter of public record and simply reach out to the exporter listed on the shipping paperwork.  In working with Panasia Solutions we are able to stop that in its tracks as any such phone calls or emails such as that would end quite quickly.  We are willing and able to offer legal protections to all of our customers through use of outward contracts and NDAs signed in common law jurisdictions such as Hong Kong, Canada or the US that guarantee we will only act in the best interest of our partners within China while at the same time we also have inward facing contracts and NDAs between our on the ground China incorporated subsidiary and our Chinese vendors which are fully enforceable under local laws. This ability to operate locally and internationally is what separates us from other companies who cannot or would not provide their customers such protections.  

By being fully integrated with the local supply chain as described above while also putting our customers’ needs and rights above our bottom line Panasia Solutions is able to use black box manufacturing to benefit its partners by providing the most competitive pricing, the most professional manufacturing, and perhaps most importantly the protection of its customers intellectual property designs and brands within China while helping its customers big and small make world class products for the global market.

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