Sourcing

General enquiries
　　- Does it makes sense to source from
　　 China for my products ?
　　- How much can I save ?
　　- At what risks and how to control them ?
　　- How much complexity will it bring in my
　　 purchase process ?

Your benefits
　　- Learn from our experience to optimize
　　 your sourcing operations,
　　- Take advantage of our team and
　　 structure :
　　 Result oriented approach,
　　 Reliability, Loyalty,
　　 Independent Quality Control,
　　 Cost effectiveness,
　　 Enhance motivation and confidence of
　　 　 your suppliers,
　　 Search for continuous improvement,
　　 Visibility, Transparency.

Cost competitiveness
Purchasing from China suppliers leads to attractive savings when a resource is available in China at low cost and makes a significant part of the total production cost.
　　　　- Energy, raw materials (plastic, metals, wood, …) are often at price level similar to
　　　　 international standards, they do not make a difference,
　　　　- But some material and many components can be sourced in China at much lower cost,
　　　　 because widely available or produced at lower cost by local second tier suppliers.
　　　　- Machinery can make a critical difference when they are available in China or in the region,
　　　　 they might be less automated but much more affordable.
Manpower is of course often the key to the low cost :
　　　　- For labor intensive type of production,
　　　　- But also when design, prototyping, preparation, finishing, supervision, sorting, packing,
　　　　 labeling, QC are an important part in the whole process.
The size of the order can be as well an important factor when estimating the China competitiveness :
　　　　- Small or medium size production batches are highly impacted in developed countries by
　　　　 the added cost of the support functions to the production itselfn,
　　　　- These support functions are often labor-based (design, prototyping, tooling, adjustments,…),
　　　　 the added cost generated by small or medium series is much lower when handled at China
　　　　 labor cost.

Supply chain total cost
Sourcing in China can save cost, but getting the goods to their final destination can add a significant cost.
Air carriers are facing huge demand for freight out of China, prices are on the rise. Ocean freight is often more cost effective but add one month in the lead time in most cases.
If components or materials have to be imported to China for transformation or integration, there is a similar issue of cost of freight and timing.
The competitiveness of the China sourcing must be analyzed under the complete view of the supply chain, in terms of cost and timing.

Risks
Foreign businesses see China supply opportunities as a way to reduce cost. Chinese industries and traders see that as a chance to increase rapidly their volume of business by accessing more export markets.
This fast growth is seen in different perspective by both sides. The Chinese side can often have a busy and short term approach : catch what they can and do their best to implement. There is little planning or proper preparation on the Chinese side. And this is understandable, when things change fast, the best tactic is to be open to grasp passing-by opportunities.
Our experience is that major risks related to China sourcing come from this situation. The Chinese supplier can become much less motivated when comes the day of implementing the order compared to the first contacts, because thing have changed for him : he may have underestimated the complexity or the level of requirements of quality, he may have encountered in the meantime other business opportunities with better profit,… He may then consider that his best choice is to implement the order with a low priority level, knowing that even if at the end he loses this customer, he has other more promising ones among his prospects.
Therefore, the selection of the supplier is highly critical.

Choice must go for suppliers proving a real commitment in establishing a partnership. And the reverse statement is true as well : suppliers will also favor customers who demonstrate a commitment and have a proper way of preparing and handling their purchases in China. Setting up a team based in China able to do the follow up with the teams of the suppliers is a very efficient way to create this relation of mutual trust.

Complexity
Direct access to the factory in the best way to secure good conditions and reliability of the supply. But this leads to the necessity to handle most, if not all, of the communication in Chinese language. Getting the supplier understand the requirements fully and correctly requires preparation and validation.
Our team is able to interface between our foreign partners and the local suppliers for this crucial issue of communication.
It means more than translating documents, it includes also building person-to-person contact between our team and their team (sales, prototyping, production,…) and give them the confidence that they are fully documented and well prepared to implement the order.

References and experience :
　　　　- Leather goods, fashion accessories,
　　　　- Paper, carton, wood products,
　　　　- Printed materials,
　　　　- Giveaway, customized items,
　　　　- Plastic products,
　　　　- IT and electronics,
　　　　- Iron and metal work,
　　　　- …