Because of several factors, the business dynamics of today are always evolving. Particularly, over the last 20 years, direct sourcing has emerged as one of the highly significant global trends in the majority of industries.
Today, procurement and supply chain managers are faced with many different challenges of improving their sourcing strategies to save costs, improve efficiency, and also boost flexibility in the competitive business environment.
To overcome all these obstacles and give procurement professionals useful information to develop a successful strategy, a well-designed direct sourcing strategy is now very important.
Let us discuss in this post, certain China direct sourcing solutions that are feasible in today’s business environment.
- Have realistic expectations
You must calculate your entire landing cost, which must also include:
- Additional customs duties
- Any other miscellaneous costs.
You should not believe the word of any unproven supplier and therefore, you must from time to time perform a reality check.
- Visit China to explore the right sources
You have to look at how the Chinese suppliers manufacture their products and how they maintain their quality high.
Most of the good companies are already meeting the demands of many other foreign buyers. Ensure that your requirements and their specifications are more or less similar.
- Start with smaller order
You should not rush into placing your big order without a proper trial. Start with opening an LC when you are ready to place your first order.
Additionally, you must also provide a 3-to-5-week extra time around their stated schedule.
- Maintain a good quality control system
You must define your clear specification and have effective incoming quality checks. After a thorough inspection, your sample clearance must be done very carefully.
You must employ someone who has in-depth technical knowledge about the product you are buying and is aware of what the market expectations are.
- Create multiple sources
You must build not just one vendor but at least 2 to 3 different vendors when developing China direct sourcing solutions.
You will have adequate flexibility in this way, and any delay or malfunction or other kind of issue at the supplier’s end won’t interrupt your production.
- Discuss specifications elaborately
Chinese products have always had a quality problem, which is typically because of misinterpretation of the specifications. Your understanding and your supplier’s understanding may not always exactly match.
Therefore, you must have a thorough conversation about the fundamental specification and come to an agreement.
- Negotiate price
Prices and business terms may fluctuate significantly depending on the size of the company.
You must thoroughly investigate the company with which you are negotiating the pricing. Also, discuss with a few more Chinese suppliers as well.
- Remain alert if any issue arises
The people who are supposed to check and inspect the quality of your product arriving from China must be quite sensitive enough to sound a timely alarm.
Therefore, you must create a suitable task force team who will be in charge of sounding the alarm at the right time.
- Develop a professional relationship
Maintaining a positive working relationship with your supplier is essential as a part of China direct sourcing solutions once you have established the product quality of your Chinese source.
Any little difficulties can be readily resolved mutually after the consumer and supplier have built mutual trust.
Key elements of the China direct sourcing solutions will include creating material interchangeability and adding redundancy to the supplier network to guarantee supply chain continuity. If you are interested to succeed in doing long-term business with your Chinese suppliers, you must also establish a professional relationship with them.