Global sourcing became less a strategic advantage instead it is a more competitive necessity. The tough competition in the market drives a lot of companies to source products in low cost countries. These companies are expecting of more return on their investments matched with increased competition drive that can make a direct and immediate impact on the bottom line. A lot of western companies have considered China sourcing parts as well as goods to achieve such goals. Retailing giants are purchasing an expanding range of goods made in China for up to 40 percent less than the cost of comparable goods that are manufactured in other countries.
With the continual margin squeeze, the growing number of industrial players has found their way as well to source basic commodities, small machining and many others. Knowing the savings opportunity that comes with sourcing China on the basic parts, these companies have greatly increased their purchases from components made in the country. The surfacing of sourcing portals has made it easier for companies to look for best Chinese suppliers. Companies are then able to find numerous that meet their needs.
One of the biggest challenges that companies are facing is the language difference but over time they have found solutions on how to effectively communicate with Chinese suppliers and manufacturers. Companies can benefit the most from the unmatched potential of Chine as a global sourcing center by dealing with few important challenges which may slow down the entire setup. A requirement for success is for the top management to understand well and sell it to create a persuasive case for their China sourcing strategy. Middle management must be convinced that the benefits of lower cost buying outweigh the increase in the cost and risks in the operation. Having a step by step approach allowing managers to gradually learn of the new methods in choosing vendors, logistics and negotiations can help in reducing the pains that may come in the transition phase. Capabilities which demand special attention when sourcing products directly include quality control and assurance, satisfying customs regulations and logistics coordination.
The first one starts with a thorough evaluation of pre-selected suppliers against the specific criteria of the company. In the evaluation process, the company should aim to gain more insights into the production process, activities, procedures, financial stability, client base and due diligence of the supplier. Companies should remember that quality management is an unending process. After the suitable supplier has been hired, its performance should be measured consistently. Without any doubt, sourcing in china manufacturers can definitely create a real advantage to companies that come from other countries however this is something that does not happens in a snap of a finger. A company looking to build value for the future must be able to being to lay foundations as soon as possible.