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"The Point" is written by BMP Editor Kelly Barner as well as a diverse group of guest contributors.

Benefits of a Supply Chain in China

The world is getting smaller every day. We have so many ways to connect at a moment’s notice. We can reach thousands and millions of people using social media such as Facebook, Twitter and so on. Look at the firestorm that took place in 2014 with the ice bucket challenge to raise awareness and funds for ALS.

Over the past twenty or so years, the desire to utilize the labor force and factories in China has grown significantly. With the better communication methods, it has been easier and provides an option for cost savings. It became quite attractive to move a significant component of your supply chain to China. However, that has come with some issues such as lead time and maintaining the expected level of quality.

This week’s article, Is Sourcing in China still Competitive covers several interesting aspects to consider while looking at sourcing trends in China.

Labor costs are rising in China but they are still lower relative to labor in other areas. When you look at the exports from China, the growth is still quite strong year over year. That is a clear indication that global organizations are finding it beneficial to have some of their production and supply chain in China.

This article gives some good advice on how to achieve the savings and maintain a quality product. The first thing is to find a reputable supplier and build a strong, long term partnership. This can take time. Some successful organizations have found it beneficial to help their supplier become stronger and producing goods at the level that is required.

When evaluating a potential supplier, they suggest taking your time to look deeper at the supplier. Take an audit, research their history and their workforce. This is similar to the phrase “Don’t judge a book by its cover”. Don’t select a supplier on first or surface impressions.  

What has your company done to extend the supply chain into China? Do you have any pointers for others trying to do the same?

Share your thoughts by commenting below or tweeting us @BuyersMeetPoint.

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Blog Pick of the Week: Top 10 mistakes when outsourcing your China sourcing

Whenever you do business in a culture different from your own, there is so much to learn. There are many nuances that can make or break the deal. This blog from Smart China Sourcing outlines some of the common mistakes.

Most organizations do not have the time or resources to work directly with the manufacturers in China so they must rely on a third party to be their 'eyes and ears on the street'. Because of that, the process of selecting that agent becomes a serious selection process that requires serious attention.

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Blog Pick of the Week: The China Sourcing Blog

There is so much interest and activity in global sourcing, and more especially what is happening in China, I think this will be a terrific resource for procurement professionals.

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