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Sourcing Agent in China – Cut Overall Expenditure for Revenue Growth

Companies have understood that “low wage” does not necessarily imply “low skill” anymore. Many western establishments joined the race to China years ago and for good reason. An attractive combination of well-developed capabilities, low costs, large domestic market and investor-friendly policies has beckoned organizations from various parts of the world to LCC markets primarily China. However, even today they face the final hurdle of putting a procurement strategy into practice. Prioritization of migration activities, investing in LCC capabilities and retention of local resources is daunting to most organizations. On the other hand, there are a number of companies who have the intent of sourcing direct from manufacturrs from China but don’t want to set up a fully owned international procurement office to manage the operations internally. In such cases, a sourcing agent in china will work closely with your company to search, find, negotiate and manage suppliers in China. They can also help with market research, quality control, pre-shipment inspection, custom clearance and supplier development.

China Sourcing – Choose the Right Path

As Benjamin Franklin put it,”The bitterness of poor quality remains long after the sweetness of low price is forgotten”. When foreign buyers consider the selection of a sourcing agent in China, they are faced with various obstacles including the right balance between quality and price. The huge supplier pool in China makes the task daunting. Differences in culture and language are additional issues. However, a sourcing agent in China can help negotiate the best prices and business conditions for you. They can monitor the whole process and help you with supply chain intelligence as well.

You need to look for the following capabilities when you are looking to identify a sourcing agent:

• Fluency in Mandarin and Cantonese
• Thorough knowledge of the Chinese business culture
• Experience in managing Chinese suppliers
• Category and sourcing process experience
• Quality Control experience
• Audit experience
• Logistics experience

China has a massive production base. Sourcing from China has become a strategic imperative for a vast majority of western companies. The cost reduction potential is huge and can be realized without having to make compromises in terms of quality. Identifying the key success factors of a sourcing initiative in China and leveraging the best practices of the most experienced corporations in this field is important. With patience and extensive research, you are bound to find the right mix of quality and service at a price which suits your budget. A sourcing agent in China will add value to your supply chain.

Sourcing Agent in China – The Advantage Grid

The hype surrounding shifting spend volumes to low cost countries is long gone. The dust has settled and companies are beginning to consider the pros and cons of hiring a sourcing agent for their business needs. A number of savvy consulting firms have led to increased interest among organizations looking for sourcing options. However, it is important to consider criteria such as quality, logistic risks, and intellectual property among others. The all-important first steps to shift volumes will determine success of the procurement strategy. The focus has now shifted from low cost country sourcing to best cost country sourcing.

Necessary Criteria for Considering Efficient Sourcing Agency

➢ Over 5 years experience in sourcing operations
➢ Staff of more than 20 people to mitigate risk of service failure as a result of staff attrition
➢ Experience with your company’s categories and industry
➢ Staff well-trained in QC, Audits, and Negotiation
➢ Documented Sourcing Process and training regime
➢ Integration with your business unit
➢ Language and management skills
➢ Client credentials

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