Foreign companies operating in China seem to be in a good position to take advantage of the local parts, equipment, tools and material supply markets. In China’s fast growing economy, the network of suppliers is dense, and investments are massive. When most buyers are Chinese Nationals there is no language nor cultural barrier that typically makes low-cost country sourcing difficult.
But local presence and local sourcing teams does not make China sourcing easier and foreign companies in China sourcing still face a challenge:
- Foreign companies technical requirements for parts or equipment are high. The large number of companies range from well-established and well-structured companies, to small and dusty workshops. Only a few suppliers can reach the required level of quality and professionalism. It is always difficult to tell which ones will!
- Large teams of young Chinese buyers are difficult to manage, train and coach. Most of the time, they do not share the same technical background nor experience than their foreign colleagues. Stretched managers have difficulties to implement adapted sourcing tools and best practices to make their work easier. For example, specific supplier panel management tools are seldom used and purchasing decisions are poorly documented.
More and more procurAsia clients are foreign companies operating in China. The many successful projects prove that they also benefit from Sourcing assistance services.
A few examples:
- Unable to locate reliable back-up generators made in China, a large retail group was importing this important piece of equipment from Europe. After a thorough technical qualification, the group switched to a supplier we recommended, one of the best Chinese company in this field, and saved 30% on each purchase.
- To operate in their warehouses in China, a large logistics company was relying on European-branded forklifts, assembled near Shanghai . But they were dissatisfied with the high maintenance fees. They had tried the most famous Chinese brands of Forklifts but were not happy with the overall quality. After a complete sourcing project, procurAsia recommended a well-organized company, mainly exporting above-the-average quality forklifts as OEM for foreign brands, and with reasonable maintenance fees.The entry of this world-class Chinese supplier in the panel resulted in a savings of 25% on each purchase.
During these typical projects, the procurAsia team designs tools and best practices that will bring long term benefits to its Client’s sourcing team, long after the procurAsia’s project ends.