Here are 10 tips to help you on your next sourcing project in China.
I have spent several years sourcing in China, where I’ve set up and run representative offices for my employers in Europe. I have over 30 tips but these are the ones I thought are most helpful as reminders or as a checklist to have.
- Make sure your requirements / specifications are spot on, clear, concise, understandable and agreed upon. This includes product specifications right down to packaging and shipping specifications.
- If sourcing from various suppliers, try and cluster your supply chain together. China is a big place, you don’t want to be travelling to Qingdao then Shenzhen every day.
- Make sure your suppliers already export to your country. They should know the language, quality, customs regulations and logistics requirements.
- Get references from their customers in your country. How much do they buy, are they reliable, how is their customer service and what learning curves can they help you avoid.
- Visit the supplier yourself. It is important to see where and how the products will be manufactured. Do they have goods-in, online and end of line quality control? Can you physically see this process working? Make sure you see the production in full flow because there is no point walking around an empty production line.
- How important would your new business be to this supplier? Would they drop your requirements when a bigger customer takes up their production capacity?
- How are you going to deal with quality fade and cost creep? Believe it or not, this will happen. Do you have an office or employees based near the factory to complete regular inspections? If you can afford the expense this will pay for itself in the long term.
- How are you going to manage the relationship? Regular visits, video conference, weekly reports, KPI’s and so on. Make it clear upfront what your expectations are and stick to them. The actual relationship side of the business is very important to the owners of companies in China. Arms length relationships will fail.
- Get everything in writing and agreed upon from contracts to SLA’s to meeting minutes. Remember the old “yes” doesn’t mean “yes I agree” analogy.
- When meeting with suppliers, ensure you speak the language or have somebody with you (employed by your company or an independent person) that does. There is nothing more frustrating than spending hours and hours travelling to meet a supplier and neither party understands each other.
