The Knowledge of China Sourcing

What is China sourcing?

Until recently, procurement was a necessary, but seldom celebrated, component of multinational corporations.China sourcing , to a certain extent, is very similar to a lot of the low-cost country sourcing or overseas sourcing .Multinational corporations have been sourcing from China for years, but that doesn’t mean that all the questions have been answered about how to engage in procurement activities in the world’s fastest-growing economy.First of all, when you say that a company is not doing well in China sourcing, there are usually two issues. Number one is they can’t find good suppliers that can supply them at a relatively low cost. Number two is they can’t move enough volume over to China. I think that these two things are usually interlinked, but they can also be separate.

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The ability of China Supplier

Nowadays, with the supply base getting much more capable and the local demand getting higher, we see suppliers being developed to a certain level that some are actually supplying to Western companies for future models, which is a new thing in China.
A lot of suppliers are extremely capable, highly automated, and as a result, by bringing a lot of the decision-makers to China to see for themselves, it actually opened their eyes and changed the perception. You cannot underestimate the impact of changing the nonbelievers [and] the impact of that on the entire organization. And by changing their attitude, the entire organization will start moving toward the right direction.This means taking a more holistic view of how sourcing fits into a company’s overall activities in China , and it requires a deeper level of management engagement.

Three imperatives are essential to successful implementation:

1. Know your suppliers inside out.

This includes understanding the true cost positions of current and potential suppliers. Assess supplier performance against major cost drivers (including wages and benefits, productivity, facility and process/equipment scale and utilization, logistics, and access to raw materials). Low labor costs and the ability to obtain cheap raw materials and components are just two possible elements of cost structure. To gain a true advantage, it is important to establish the ideal combination of world-class performance with location, scale, process technologies and automation, and success in execution. It will then be possible to rate potential suppliers against that ideal and determine how close a supplier from a low-cost country can come to meeting it.

2. Develop strong relationships with a small number of suppliers.

Identify the suppliers that are willing to commit to a long-term relationship and to jointly creating a competitive advantage. Offer an enduring and profitable business relationship to each supplier and, in turn, demand its commitment to meeting cost, delivery, quality, and, if applicable, innovation targets. This will likely require local resources dedicated to supplier development, which means working with the supplier to achieve ambitious jointly established targets.

3. Work jointly with your suppliers on continuous improvement.

Focus on developing suppliers’ capabilities and advancing their competitiveness over time. Set ambitious but realistic targets for better performance in cost, quality, delivery, or innovation, and work with your suppliers, not against them, in achieving those goals. Successful continuous improvement requires agreed-on objectives, clear communication about current and anticipated costs and processes, and an open exchange of ideas about how to improve.

Any one interested imports from China 。please comment with details:http://china-sourcing.com

10 Tips for China Product Sourcing

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1.Learn about the supplier’s products, processes, costs and market.

In each product category, there are still thousands suppliers, and most people don’t know how to select their most suitable supplier. You’ll be your own best advocate only if you understand a supplier’s processes and its operating environment. By talking to a number of vendors, you’ll learn the industry jargon, the products available, as well as the expertise of individual suppliers. This information will be valuable during negotiations with a supplier, particularly in evaluating concessions that your supplier might consider. This does apply to China. We are always telling our clients to go visit their own factories in China and other factories and not just rely on what they are hearing from their agents or the factories themselves.

2.Change your demand pattern.

You can revise your purchasing policy by consolidating your purchase orders. For example, rather than authorising individual departments to issue purchase orders to one supplier, require that the requirements be combined in one consolidated purchase order, the size of which must be large enough to earn a price discount.
Also, you might also create a purchasing consortium with other companies and place orders with one or a few suppliers, rather than many. Your company might also switch from one material requirement to a lower-cost product. Sure. Buying more will usually get you a better price than buying less.

3.Cease doing business with supplier

As a last resort, you can cancel existing orders and exclude the supplier from future competitive bidding rounds. Before you institute this process, meet with the supplier and ask for a price concession. Also, confirm that another source of supply is available. The most important thing to do before terminating a Chinese supplier relationship is to be prepared for all the bad things that will likely happen from that termination and to have another supplier already lined up and ready to go.

4.Compare the price, choose your best supplier

By the time you receive the price quote from professional suppliers (usually they are good trading companies), you already know the appropriate product price in accordance to the quality. To avoid unnecessary issues, you as a customer need to tell them every minute detail about your requirement. Suppliers quoting 15% lower price than the professional, tend to supply products that might be different from your expectations. It is vital to order a few sample products to check quality, before making bulk purchases.

5.Work with multiple suppliers

it’s a good idea to think of building your own factory in China, which is what they now have.If you only have one supplier, then that company know that strategically you are not in a strong position and this can lead to them dictating both price, delivery times and quality.

6.Be careful of intermediary shipping

What Shoes of Prey found was that because the intermediary were paid by the cubic metres of the shipping parcels and then they in turn were charged by DHL in cubic metres, they would unpack their nicely packed shoes boxes, and cut down the top off the shoe box to make the shipping cheaper for them.
Trust Your Gut

Some vendors are almost too friendly. This is probably due to the cultural differences that exist but when I say too friendly I mean 2-3 emails a day, asking if you want to look at or buy something after you’ve explicitly declined or said no 3-4 times.

7.Be As Specific As Possible

Tailor your vendor inquiries for specific product categories. This might sound obvious but it’s important to be very specific from the start about what you are looking to buy including types of products, materials, size, color, etc. Otherwise, like me you might receive a different and most likely cheaper product or material than you intended.

8.Most Vendors Expect Wire Transfers

Payments! Most vendors will allow you to pay via PayPal. Some have PayPal but will not tell you unless you ask so make sure to ask. In fact, with most vendors, I used wording along the lines of: “Our company policy states that first time samples purchases be made using PayPal”.
Always Obtain Samples

9.Samples are an investment.

Pharmaceutical companies are notorious for spending millions of dollars on R&D every year. Most drugs will not make it through clinical trials and some will not receive FDA approval, but the few that do make it past all the hurdles will make the investment worth it.

10.Know The Difference Between Manufacturers Vs Trading Companies

In general, it’s pretty easy to tell if a supplier is a manufacturer or a trading company (wholesaler/retailer). I did however notice some very distinct trends between the manufacturers and trading companies.As a general rule of thumb, the ones that say “Import/Export Co” are more than likely not manufacturers even if their company profile states manufacturer.

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