In the highly competitive global procurement landscape, it is a well-established fact that China procurement presents unmatched purchasing opportunities for businesses across the world. However, companies trying hard to deal with China directly have discovered that there are many pitfalls and the cost savings they had thought of is oftentimes nowhere in sight. They end up fighting cultural differences and communication issues amongst many other complications that may arise when they choose China as a low-cost country sourcing option.
Most of the legal settings in the Public Republic of China (PRC) are relatively new and most were established only after the PRC joined the World Trade Organization in 2001. Experienced businessmen in China are insufficiently familiar with the Western way of conducting business and continue to follow traditional Chinese practices. Hence, it matters more to maintain a good relationship with a supplier than to draw up a detailed contract with all the latest terms and conditions in mind. These long-term relationships are also referred to as “Guanxi” and are extremely important to achieve business success.
China – Supply Chain Hotspot
Over the years, China has emerged to be an important supply point and it has transformed itself into the major hub in the world. Its rapid economic development makes it an ideal seller’s marker with a gold-digger atmosphere. While businesses consider newer and innovative ways of sustainability controlling their costs and at the same time seeking quality and product improvement, China procurement seems to be the best option. However, you should be warned that initial profits are crucial to determining your relationship with Chinese suppliers. It is important that your first project is well-researched. Keep in mind that the Chinese are not the kind of people who will admit their faults directly and there is every possibility that they might not maintain quality levels for low quotes. Hence, for businesses seeking global sourcing China advantages, it is important to consider the accompanying risks and the best means to tackle them as well.
Value of China Sourcing Service
Developing a sourcing strategy is crucial to establishing a process and realizing the expected benefits. Depending on your needs, you can choose a supplier development approach or even a more traditional competitive tender strategy. Either way, you will require the services of an experienced company for vendor selection and contracting. There are a number of non-price factors that will help drive your supplier selection decision and only an experienced Chinese-based procurement service provider can help evaluate all these factors. (quality, delivery, innovation, etc). They will help convey the expected performance and service level requirements of their clients to the suppliers while also updating the suppliers about the consequences of non-compliance. They follow a disciplined approach so your relationship with Chinese suppliers can be structured for maximum benefits.
China Procurement – Make China Work for You
Businesses across the world believe that China is the world leader in cost-competitive manufacturing. However, global sourcing in China can turn out to be problematic due to cultural barriers. Trying to conduct direct-to-manufacturer procurement in China by your own from a distance is a probable recipe for frustration and failure. However, procurement companies can help you access solutions according to your specific needs. With the help of experts working for such companies, you can overcome the cultural and logistical complexities that seem to vex you. Streamline your purchasing process today and help your business deal effectively with the most common problems faced by others, i.e.: people training, development and retention in the sourcing country, global sourcing risks (quality, delivery, social responsibility), and cross-functional teamwork and collaboration between the China procurement team and the key stakeholders in the home country