Several months ago, one of our European clients hired us to assist them identifying conveyor frame suppliers in China.
We know the Material Handling market very well, so the identification and screening of potential suppliers was quick. After pre-qualification, we drafted a RFQ for all required types of frames, using the client’s technical specifications. Our client was very satisfied with the prices. The management came to China to meet the best suppliers, make a final selection and discuss their first purchase orders (P.O.). After returning to Europe, the client immediately paid the tooling fee – my project was on the go.
Loosing the momentum
But then, nothing happened for about six months.
First the supplier indicated that for one type of heavy frames, they would use a new machine that would be installed a couple of months later. After the machine was installed, it seems that the initial momentum was lost. Our client did not place the pilot purchase order for awhile. The frame supplier started loosing patience and hope. From the Chinese point of view, 6 months is a very long time to make a decision.
I think that our client was preparing for some large contract with their customers and was planning to use Chinese frames. But they were waiting for a confirmation of the contract before issuing the purchase order.
Then, the long awaited frame P.O. arrived, with a request to first produce a sample of each type and to have them inspected by the procurAsia team.
Unfortunately, a critical dimension was out of tolerance for some of the frames ! The supplier engineering team tried several methods to produce different batches, but the problem was still there.
The situation seemed blocked: on the supplier side, because the first purchase order quantity was not large enough, they didn’t put this project on the top of the list; on the client side, as they started loosing confidence in the supplier.
Our client started asking us to find another supplier. Typically, in such a situation, any chance of business between the two parties would be gone, and all would have to be started from scratch.
Communication with supplier
Still, the key was to really understand what the problem was and to try to find a solution. I didn’t want to give up before we really knew what the problem was.
So, I went several times to the factory in Zhejiang to discuss with the engineering team and analyze the causes of the problem. We reviewed together the production process, the machines and the tooling for the production. Finally, we figured why the tolerance was not respected. And we also found a potential solution, if the client allowed a small change in tolerance, much less critical then the original problem.
The client could live with this new situation and, within a couple of days, they confirmed their P.O., opened the letter of credit and the ball was rolling again. A few weeks later, the first container was heading to Europe.
A first purchase order with a Chinese supplier is always difficult and can require a long time. You need to build trust between buyer and supplier, create clear communication and resolve any initial misunderstanding and face all technical problems at the same time.
In this case, like in many others, procurAsia’s support is to make this difficult process easier and safer. It also makes it economically affordable – I cannot imagine the cost of flying someone from Europe for each of the meeting I had with the supplier !
This is the value of procurAsia