How to getting sourcing right in China?

The status of China sourcing

China ’s rapid rise as a low cost manufacturing hub for top quality products has made many companies from around the world rush into this market for production of their goods.

As a short-term measure, companies might redesign their performance incentives in order to encourage purchasing managers to buy goods from China. One retailer introduced “incubation” incentives to motivate its buyers, rewarding them with bonuses for the volume of products they sourced there.

What approach will Chinese manufacturers  choose?

In addition, executives must find ways to minimize the pain of process changes and to make them acceptable quickly. One manufacturer began by using its existing processes to select, approve, negotiate with, and manage vendors instead of setting up a special Chinese initiative staffed by employees whose powers usurped the authority of sourcing and product managers. Processes and sourcing roles changed only after the company became comfortable working with Chinese suppliers. This manufacturer believes that the experiment helped its managers design a better sourcing program by allowing them to learn gradually about new approaches to purchasing, logistics, selecting vendors, and negotiations.At first sight it seems easy: Divide your total spend into different categories (eg, indirect such as office supplies and IT, and direct strategic goods), identify the number of vendors per category, focus on the biggest fragmented spend area and negotiate better contracts with your key vendors.

How to be confidence into the Chinese market?

Multinationals set up operations there, and domestic companies expanded to make goods for export and to sell products and services to multinationals doing business in the country.
Sourcing products from China will present problems that retailers will need to deal with, but for retailers in a position to expand their products line that much, sourcing from China can be worth the extra hassle and money it costs. It’s important to have a thorough understanding of how you’ll manage your overseas inventory, pricing, and whether or not you’ll be saving money by moving some, or all, of your product operations over to China. Once those questions are answered, you can proceed with confidence into the Chinese market.

What is the best way?

They should follow a clear 6 step approach.
I) Diagnose the opportunity, by creating a rough overview of the global spend and optimization potential per category (based on, e.g., number of vendors and vendor market position).
II) Select the focus categories and establish global transparency.
III) Identify improvement levers per category, including both externally oriented opportunities (e.g., consolidate spend with fewer vendors) as well as internal levers (e.g., better use of procured goods and better coordination).
IV) Identify the organizational prerequisites to capture the identified potential.
V) Perform first phase of reorganization and execute category optimization phase.
VI) Establish process, tool and procedures to enforce new procurement policies.

 

The 16 Best China Sourcing jobs

Research Analyst

A research analyst is a person who prepares investigative reports on securities or assets for in-house or client use. The work conducted by the research analyst is in an effort to inquire, examine, find or revise facts, principlesandtheories for internal use by a financial institution or an external financial client. The report an analyst prepares entails the examination of public records of securities of companies or industries, and often concludes with a “buy,” “sell” or “hold”

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Strategic Sourcing Manager

StrategicsourcingManager is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In the services industry, strategic sourcing refers to a service solution, sometimes called a strategic partnership, which is specifically customized to meet the client’s individual needs.

Category Manager

Category management is a retailing and purchasing concept in which the range of products purchased by a business organization or sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might be

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Product Development Manager

In business and engineering, new product development (NPD) covers the complete process of bringing a new product to market. A central aspect of NPD is product design, along with various business considerations. New product development is described broadly as the transformation of a market opportunity into a product

Purchasing Manager

A Purchasing Manager is an employeewithina company, business or other organization who is responsible at some level for buying or approving the acquisition of goods and services needed by the company. Responsible for buying the best quality products, goods and services for their company at the most competitive

Director of Transportation

Transportation operations directors areupper levelmanagers that ensure inventory and transportation needs are met within a company. They are in charge of a business’ supply chain, which is how a product gets from the supplier to customers. They oversee the entire life cycle including but not limited to acquisition, distribution, and delivery. These individuals are necessary for every industry and often have to work quickly and in stressful environments. They must have strong communication,problem solving, and organizational skills.

Value Engineer

Value engineering (VE) is a systematic method to improve the “value” of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value canthereforebe increased by either improving the function or reducing the cost.

Manufacturing Program Manager

Manufacturers depend on project managers to determine budgets, timelinesandresources for various projects in plants and factories. They also lead, coach and motivate other workers on projects, determine whether the business needs outside vendors and write project status reports for uppermanagement .

Supplier Quality Engineer

SQM member of a New Product Development project team, from quotation phase until project targets of the manufacturing location (s) are achieved.

This position is responsible for the development and production launch of components which will guarantee a Continental flawless product launch related to any topic of components delivered by external suppliers.

Determine supplier feasibility commitment, conduct Advanced Product Quality Planning (APQP) activities with suppliers, develop and ensure implementation of supplier’s Safe Launch Plans.

Technology Scout

echnologyscouting is an element of technology management in which (1) emerging technologies are identified, (2) technology related information is channeled into an organization, and (3) supports the acquisition of technologies.

Director of Operations

The area of responsibility for this role is very wide and thus requiresthoroughknowledge of various company processes. The ideal candidate must be competent and able to plan many different kinds of operational activities. He/She must be an excellent leader who can discover the most efficient ways to run the business.

The goal is to safeguard and augment the efficiency of the company’s operations to facilitate accelerating development and long-term success.

Quality Engineer

A Quality Engineer works within the quality team to ensure the overall quality of a manufactured product andaretasked with creating documentation, devising quality tests and defining the criteria a test result should meet. They play a key role in fixing issues when they arise.

Account Managers

Timely communication and professional customer service.

Logistics Team

Basic PO processing Supported by our ERP system, International Shipping & Logistics
English Translators

Basic and technical translations of specs and drawings

Factory Calling Center

They do only one thing, calling factories to get price and verify basic information

Project Managers

For setting up of complex supply chain

How to be a good China agent?

What a good China agent do?

They are a necessary buffer zone, the thing that keeps the industry separate from the art. It is entirely possible, of course, that agents themselves can be exploitative – and the right terms are not necessarily the same as the best possible terms.

What is the standard agent process?

I’d say that the standard procurement process should look something like this:
1.) Confirmation of product specifications and certification requirements
2.) Supplier sourcing
3.) Initial price research, sample order and selection of qualified suppliers
4.) Initial price negotiation
5.) Audit of qualified suppliers
6.) Final supplier selection
7.) Sales Agreement
8.) Production and Quality Control
9.) Shipping

The questions a agent should be answered:

Apart from having a pre-determined purchasing and procurement process in place, your agent shall be able to give straight answers the following questions:
1.) On what factors do they deem a supplier to be qualified / not qualified?
2.) Will you pay the purchasing agent for the products or pay directly to the supplier?
3.) What’s their strategy on preventing and countering frauds? (I.e. Payment frauds)
4.) Will they manage the whole purchasing process ”in house” or outsource parts of it? (If yes, which parts?)
5.) How is the agent prepared to deal with potential quality issues during and after production?
6.) How long have they been established?
7.) Will they send the inquiry to an already ”tested” supplier or source a new supplier?
8.) Do they have any buyer references from your country? (Never work with a purchasingagent who refuse to provide you with buyer references)

Why choose China Sourcing?

China Sourcing has many years experience in goods inspection, improve the qualified rate, increases product quality for you, most of our products qualified rate more than 98%, if there have any issues, we will feedback to you once found, will provide best solution in shortest time. I found many people want looking for products in china, but they didn’t know how to find right products suppliers in China, it is hard to find right products suppliers. Also we provide you with factory price, just charge little service fees when order finished, we ensure that provide you with factory price, because of we have many direct factories, can get the price from factory boss. Nowadays, the dramatically competition happened on trade, dongsourcing agent dedicated to provide high quality and multiaspect services to the customers, help you creates valuable fortune.

 

The 3 types of sourcing companies in China

In other cases, you need to make a choice between three types of China sourcing companies:

The commissioned agent

If you find someone that you can trust, and who already has deep experience in the product line you are looking for, this can be a good option.These agents are seldom professional enough to really manage production and to ensure good outcomes. Once the orders reach a certain size, it is much better to manage everything with your own team.

The trading company

One of the important differences between sourcing companies and trading companies is that trading companies will have a high level of expertise in a specific field.

If you purchase low quantities and if you don’t want to handle all the details of Chinaproduction, you probably need to work with a trading company. What bothers some importers is that the supply chain remains hidden. This is a valid concern. Even if you purchase from a trader, you should inspect the product quality — except if the trader pays for a famous third-party QC firm to do it, and shows you the reports.

China Manufacturers

Manufacturers are often seen as the best and only source for your goods. You can communicate your needs directly with them and, if they are the right factory for you, they will have a high level of expertise in the manufacturing process.Factories will make products to your specifications and within the tolerances you demand. The factory you choose will have probably been making similar goods for some time.

Which Type is Right for You?

This decision is unique to each importer and is based on several factors, such as:

  1. Experience importing from China.
  2. Understanding and knowledge of import regulations and processes.
  3. Understanding of compliance requirements in the country where the goods will be sold.
  4. Size of your order – the total order value, as well as order value per product and per supplier.
  5. Resources available to manage the import process.

Still not sure which of type of sourcing agent is the right one for you? Contact us. We would love talking to you about your projects in China.

How to look for purchasing agent in China?

What is a China purchasing agent and why do you need one?

The Procurement Agent is a freelancer, or part of a larger organisation, arranging various aspects of the trade between China and the buyers around the world.

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Below I list a few examples of what a purchasing agent can help out with:
 Supplier Identification & Price Research
 Sample & Prototype Development
 Quality Assurance & Quality Inspections
 Social Compliance Audits
 Product Compliance Consulting & Product Testing
 Shipping & Logistics
 Customs Procedures & VAT

How to Evaluate a Procurement and Purchasing Agency in China?

  1. Product Expertise Knowledge about a product and industry is a decisive factor. First, and an insider has a much more comprehensive product expertise, which is required to understand what makes good quality (and price) for a certain product.
  2. Offered Services Some offer more of a ‘one stop shop’ solution while others are strictly specialized, only performing specific functions.
  3. Procedures However, identifying industry leading, and in relative terms, reliable, suppliers is a whole different thing.

What the standard procurement process?

the standard procurement process should look something like this:

1.) Confirmation of product specifications and certification requirements

2.) Supplier sourcing

3.) Initial price research, sample order and selection of qualified suppliers

4.) Initial price negotiation

5.) Audit of qualified suppliers

6.) Final supplier selection

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How to work with a purchasing agent?

Our Recommendation:
1. Use a specialized Sourcing Agency or manage the process yourself. You must know which suppliers you’re going to work with, and on what merits they are selected. Vetting ten to twenty suppliers at once is a lot of work, so you better have a specialized partner for this. Suitable for customized products that takestime to develop before they are ready for mass production. As you pay a fixed service fee, the agent has no incentive to cut corners to speed up the process,or convince you to place large initial orders.
2. You are the product expert. Submit specifications and communicate your quality requirements directly with the manufacturer. Otherwise, important details may be lost in translation. In addition, having a middleman between you and the supplier is not only risky, it’s also inefficient.
o a. Find a local, or China based, Compliance Consultant that can help you assess which regulations and labeling requirements apply to your products, in your market.
o b. Submit reference samples to a China-based testing company, for example, Asiainspection or SGS.
3. Use a specialized Quality Assurance agency, for example, Sofest Limited.
4. Use a local Freight Forwarder, with a presence in China. It’s critical that they know local customs procedures and tax regulations.

Have a quote? Visit our site:China Sourcing– http://china-sourcing.com

April 11-14, 2018 | AsiaWorld-Expo, Hong Kong–China sourcing Fair 2018

About the China Sourcing Fair:

Name:Consumer Electronics

Date:April 11-14, 2018

Booths:3,800 booths

Exhibit profile: consumer electronics, gaming, components and smart living products

Consumer electronics or home electronics are electronic (analog or digital) equipments intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment communications (telephones, cell phones, e-mail-capable laptops, etc.), and home-office activities.

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The shows are also heavily attended by a wide range of small and medium-sized importer, wholesaler and retailer businesses – including a fast growing segment of Amazon and other online sellers.

Since the shows are dedicated to strategic sourcing, the majority of attendees have purchasing authority — and executive management job titles like Owner, Partner, President, Director and General Manager.

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Approximately 15% of buyers place orders at the show while an additional 30% place orders within a month of attending.

There is also a growing amount of sourcing where the buyer is purchasing the Asian suppliers design and/or brand.

 

3 Secrets to Successfully Sourcing From Chinese Suppliers

You are dealing with people halfway around the world, with cultural and language differences, negotiating over your investment of potentially thousands of dollars in inventory with people you likely just met on the internet.Figuring out how to find a supplier to partner with, how to structure the negotiation, payment, and quality control is a critical step to successfully launching your China sourcing business.
3 Secrets to Successfully Sourcing From Chinese Suppliers:

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#1 Choose The Right Supplier

1. Sourcing: Tricks of the trade • Chinese cultural and value differences: It’s a relationship business • Supplier Selection Strategy • Negotiations: You get what you pay for • Quality control: The Neverending Story • Best practices and bonuses
2.Chinese culture and values are not the same • What is “Guan Xi”? 关系 • Trust • Respect • Face • Time invested

When finding potential suppliers, Alibaba is the behemoth that you should look to first. As the largest online marketplace in China, it has the most quantity of suppliers, but not necessarily high quality.

China Sourcing is another option for finding suppliers. There is less quantity, but each supplier must pre-qualify, so the quality of supplier is possibly better.

In addition to these online marketplaces, going to trade shows is a great place to find suppliers. The Canton Fair is the largest, held twice a year in China. However, there are industry-specific trade shows in the US and Europe where you can meet Chinesesuppliers in person and build Guan Xi, or your business relationship.
As a result, suppliers will be more responsive to your requests, will offer more favorable pricing and payment terms, and be more accommodating in fixing problems as they arise. In order to protect yourself against that fate as much as possible, you have to be extremely vigilant about protecting your product and brand.

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#2 Negotiate With Your Supplier

The implication here is that there are more at play in a negotiation besides just the final price. For example, you are also negotiating the quality of product, the payment terms, the delivery times, and your relationship with the supplier.

Moreover, every supplier does have a “price floor” below which they can’t go below. So if you strong arm a supplier and force them to go below their price floor, there may be negative consequences. This could be cutting corners with cheaper materials, less quality in manufacturing, shoddier packaging, or any number of other things. The main takeaway is to build a long-term relationship.

Remember, negotiating with Chinese suppliers is an ongoing process. It is a common thing, and even expected, in Chinese culture and business. If you do it at the factory in China, or even an international trade show, you are more likely to speak with the factory owner or executive management. This means that problems and challenges can be solved with greater ease, because you are dealing directly with decision makers, and not sales reps.
1. Negotiations • 一分钱一分货 • Translation: “You get what you pay for” • Price is not the only factor
2. When do I negotiate? • Initially: Shortlisted suppliers • As volumes grow: Higher volumes = Lower per unit price • External factors • When problems occur and supplier is at fault
3. Pricing: How much? • Cost-based approach • Wide net then deep sea fishing to gauge the factory price
4. How do I negotiate? • Strategy – Always play the long game, remember guanxi • How will this grow your business relationship together? • Communications: Face-to-face > Phone call/Skype > Email

#3 Monitor Your Quality Control:

Quality control in the production process is critical to success. Problems may occur for any number of reasons, but you protect yourself if you are able to get an agreement in writing. Do your best to specify materials, measurements, packaging, product quality, and any other specifications in writing. If a problem occurs, and the supplier is at fault, you can refer back to this written agreement for an appropriate refund or credit on future orders. Additionally, request a sample from the supplier before you make any supplier decisions.
In order to maintain the highest level of production quality, you want to keep your suppliers accountable through the whole process. Get everything in writing by using a Purchase Order. The important thing to note here is that you still have leverage before you have sent the final portion of your payment. If there are aspects of the order quality that do not meet what was specified in the agreement, the supplier is more willing and likely to take corrective action if they have not received full payment.
1. Quality Control: Supplier selection • BEST PRACTICE: Country test to initially gauge quality and experience • Get Samples to do a hands on test • At the same time, gauge their customer service
2. Quality Control: Placing order • GOAL: Make sure that factory understands and agrees to your requirements • Get it in writing on the Purchase Order
3. Quality Control: During production • GOAL: Catch problems as early as possible • Monitor production by asking for photos, videos, and samples • Expect factory to be passive, YOU MUST BE PROACTIVE
4. Quality Control: After production • Arrange an inspection before releasing balance of payment • Third party inspection agency • Especially when working with a new supplier or product • Tricks of the trade: Self-inspection
5. Quality Control: After shipment is delivered • Watch for defects • BEST PRACTICE: If factory is at fault: • Negotiate for compensation • Corrective Action Plan (CAP) • Put it in writing in the Purchase Order • But don’t burn any bridges, remember Guanxi • Rinse and repeat