Supplier development

Container-Loading-Inspection

Among thousands of options and possibilities to choose from when selecting a supplier, it can be quite challenging to identify and fully trust the one option that looks like the one that meets your demands.

We identify and catalogue a select group of factories that meet the manufacturing processes, quality standards, target price, certifications, delivery time, and specific requirements of each buyer.

Our sourcing skills combined with our extensive database gathered over more than thirteen years in China upholds thousands of supply options adequate for your industry.

There are several factors to be considered when planning on buying “made in China” products, for instance, the labor cost has increased surprisingly fast in the last years, from 1.50 USD/hour in 2009 to 3.9 USD/hour in 2019; manufacturing inputs costs, transportation rates, tax and tariffs have risen as well.

In addition, the exchange rate went down from 8.4 to 6.8 CNY/USD in the last twenty years (1999-2019) that is to say, production costs in China have increased by 19%.

Source: Federal Reserve System (US)

Most domestic and foreign factories have no choice but to increase pressure on their production and supply chain associates, all in the spirit of retaining their customers by maintaining competitive prices; often leading to manpower loss, strikes or business discontinuity, in other words many factories struggle to sustain quality and short delivery frames.

Why to invest on a supplier development program?

Suppliers in China are likely to be mindset changing, hence the importance of building long term business relationships, instead of spending time and money putting out fires, we recommend to  build self-sustained business development strategies allowing to increase your productivity.

It is of the essence to implement a supplier development strategy, in which both buyer and factory get involved in order to improve significantly the quality, price, manufacturing cycle periods,  innovation, and cost reduction.

We’d like to  emphasize on the benefits of planning your supplier development strategy, setting goals and KPIs, determine your Quality Standards and regular monitoring of your ongoing production (visits and audits), increase your performance by:

  • +7 to 50% product quality
  • 0 to 18% cost reduction
  • -10 to -90% on time delivery
  • +10 to +70% of order - “time-to-market” cycle period

These figures are based on our own experience and may vary depending on the industry, product type and suppliers´ maturescence.

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Tips for developing a Chinese supplier

Compare and select the supplier with the right profile

Factory´s facilities, equipment, warehouse, … in good conditions

Skilled manpower

Technological and product innovations

Willing to go through a learning curve

Find suppliers that want to improve

Get involved during the product development

Explain products specifications as clearly as possible and make sure you were understood.

Use native translators to explain technical specs.

Train the QC staff to identify and correct defects during production and at finished products stages.

Give detailed and accurate feedback while developing pre-production samples

Make sure your Quality Standard is met:

Monitor the quality of the products during the production, external inspections are suggested (most managers never get out of their office to do it themselves)

Incoming components or materials are rarely checked, the lack of rejection protocols is very common

Internal insufficient or non-existing process inspections

Uncollected data regarding the most frequent defects, therefore nobody knows what the root causes are

Define and implement a production strategy

Which will be priority? price, quality or delivery time/smaller batches

Define KPIs and track their improvement constantly

Avoid price increases down the road

Visiting your supplier increases significantly the relationship and the performance

Agree on the planning of improvement initiatives