+ MEMBER LOGIN Username: Password: Remember me Lost Password Home | Contact us | Login ABOUT US SERVICES INDUSTRIES 关于我们 Get Started   Successfuly sourcing from China requires a systematic approach.  China is remote both from a geographical and a business culture standpoint.  Any shortcut in the approach significantly increases risks of bad surprises or even failure.  To avoid the main sourcing pittfalls, always go through the following steps, for each of which procurAsia has advices, tips and best practices to assist you.     Many China sourcing initiatives fail because they are not at the heart of a well thought plan or company vision.  Successful companies have thoroughly prepared their project, they: Define specific ranges or families of products for sourcing based on an analysis of volume, labor content, technical complexity and other technical, logistics and commercial aspects. Spell out clear objectives in terms of cost target, product specification, volume ramp-up, sourcing project budget and supplier ideal profile. Get a company executive to actively sponsor the project and set up a multi-function project team.   Request procurAsia's China Sourcing Preparation Guide   Related Topics Story: Buyers, be well prepare for your first visit.       To get a short-list of suppliers matching your criteria a buyer need to investigate a very large number of potential suppliers. Only a small portion of them will be good enough to be seriously considered for further steps. There are no "Golden Page“. Online directories are useful but not sufficient. Information provided by many suppliers is not a good representation of their capabilities. The right way to build an initial short list will require you to: Identify a long list of potential suppliers as long as possible. Contact each of them by phone to collect information directly from their sales representative and evaluate the credibility of this information. Reject the ones that fall outside selection criteria or whose credibility is not strong enough..   Contact procurAsia to start an identification project   Related Topics Case: Company brochures not good source of info Case: Direct phone contact with supplier is key   This is probably the single most important step of the whole process. Out of all the suppliers that offer products similar to what you are looking for, you need to find the right match: technical capabilities, required volume and production capacity, potential for growth and development. Finding the right supplier a systematic and thorough approach: Perform on-site qualification visits for each short listed supplier. Thoroughly evaluate all aspects of the supplier’s business.. Collect samples or visit reference sites. Pre-qualify more than one suppliers.   Contact procurAsia to perform pre-qualification visits and save you unnecessary business trips   Related Topics Case: Make sure your supplier will not sub-contract any part of your order without telling you. Case: At least half of the short listed suppliers are dropped after on-site visit. Many looked good on paper but are appalling Example of well-documented supplier reports   Getting reliable pricing information from Chinese manufacturers require special attention: Prepare a detailed and complete RFQ, including all necessary technical elements and standards. Actively manage the bidding process with frequent clarification and follow-up phone calls. This is the only way to ensure valid quotations on time. Quickly reject uncompetitive quotation and review the assumptions made by suppliers.   Contact procurAsia to share our experience in RFQ Management and get assistance     Technical and commercial discussions and negotiations are best held face to face. It is important to avoid misunderstanding and to build a personal business relationship with suppliers. This is the best moment to organize a high efficiency China trip: Have face-to-face meetings with the 2 to 3 pre-qualified suppliers. Take the opportunity for a last technical and operation clarification. Negotiate pricing and other terms. Agree on the first order: estimated size, timing, payment mechanism, documentation.   Contact procurAsia to share our experience and get assistance   Related Topics Case: Do not understimate the time and effort to agree on the first purchase order.       Safe sourcing from China is only possible with a well structured quality control system managed by the buyer or its representatives: Prepare and execute a thorough Quality management plan. Make regular visits to suppliers to validate planning and progress. Verify supplier quality documentation and run sample inspections. Link payment of the goods to pre-shipment certificate issued by trusted party. Dispatch engineer on site if there is any doubt of quality or operational problem.   Avoid frequent flying to China and get procurAsia’s China team to implement the quality plan   Related Topics Case: An interesting experience of quality Mgmt.       Once this first project with a supplier is a success, think about how to get more from your supplier: Get more products in the same family of products. Benefit from larger savings by increasing the scope of work of your supplier. Get access to cheap technical resources by asking suppliers to work on product variants.   Contact procurAsia for more information on the potential of supplier development   Related Topics Case: Successful supplier development.     Other related stories Communicate periodicaly with supplier will save you lots of troubles You will save much time and trouble with your Chinese suppliers if you keep the discipline of periodically communicating with them, even though you have no order to place. Survey on China sourcing good practices An interesting survey about what China sourcing practitioners are considering good practices. Foreign companies in China can also benefit from Sourcing assistance services More and more foreign companies operating in China use procurAsia services. For them as well, we find better suppliers and improve their sourcing performances Many companies successfully source from China One third of 650 executives surveyed by Deloitte feel they are VERY SUCCESSFUL in sourcing from emerging markets. This is how they managed it . . . McKinsey Quarterly article: "Bringing Best Practices to China" An excellent McKinsey Quarterly article explains why reaching operational excellence is now crucial for all multi-national companies operating in China procurAsia article: Effective sourcing in China requires Western companies to change Biggest implementation challenge of a China Sourcing initiative: Drive & manage the internal change in Quality Engineering Logistics & Design departments First orders are often time consuming ! Do not underestimate the time required for the first purchase order from China. Getting your first delivery from a new Chinese supplier is often a time consuming process. Welding Robotization in Racking industry This China Racking exporter manufactures pallet racks for manual & AS/RS warehouses & develops welding robotization for export products Would you pick this supplier? Nice catalogs, new facilities and listing in directory of suppliers in China are not indicators of the true quality of a supplier. Quality Management vs Inspections Quality management and quality inspections are not of the same nature: A story of parts properly "inspected" in the Chinese factory but rejected by the final user in Europe! China Sourcing Strategies A few examples of Strategies used by western companies to develop their China sourcing for industrial parts. Some that work, some that don't... Working with Chinese suppliers forces you to change also Western companies buying in China shall adapt their purchasing habits, expectations, methods and negotiation style An example of well managed factory in China Some pictures from a well managed factory we have visited several times lately. Supplier development case study Successful case of supplier development with a plastic extrusion company near Shanghai. Implementation of Lean Manufacturing principles Evaluate the quality of your supplier's management Evaluating your supplier's management is very important. A real example illustrating how the competence & attitude of the management team is critical to the long term viability of a company Copyright © 2004-2010 PROCURASIA LIMITED. All Rights Reserved.