Finding Suppliers Suitable for Production Status & Long-term Development

 

Contributed by Sandy Cui, SunFaith China Limited

To foreign companies invested abroad, China is not just the global biggest emerging consumer; it will be the global center of manufacturing and production in the future. Even though China only takes up 13% of global manufacturing market share, according to expert’s forecast, it will exceed America to be the No. 1 manufacturing base in the world by 2020.

The localization of industrial manufacturing is even higher than that of fast consumables and luxuries. The development of MNCs’ cooperation mode with suppliers in China is as follows: multinational companies find OEM manufacturer in China at first; suppliers provide a series of fittings; then, the supplier management system is widely applied. More and more multinational companies ensure that the purchase policy can satisfy the current production demand and the company’s long-term strategic development through uniform supplier evaluation system, purchase flow management system and supplier management mechanism.

Take the famous electronics industry enterprise Phillips as an example. (Although Phillips is trying to transform its business to high-end industrial electronic products, the supplier management mechanism applied in China still can be utilized by other manufacturers). CSG mode setup by Phillips Lighting in China helps companies get rid of the complicated relationship management with suppliers and customers, so the company can provide better service to meet customer demand. The notable results are showed in the following charts:

The evaluation to the suppliers is also essential during the usage. If CSG ensures the efficient communication and reaction between companies and suppliers & customers, the evaluation to suppliers helps companies find suitable partners in shorter time. As a result, the time saved can be spent on R & D of manufacturing and technology. A complete evaluation includes human resources, manufacturing technique, production processes, production plan management, logistics management, etc., covering analysis on all sides of company information. Finally, based on their own production status, the companies find the most suitable suppliers. If the production and management mode and that of the company are not matched, the advantages will be unapparent, even worse, the long-term development will be restricted. Just depending on the complete and systemic evaluation system to suppliers, Phillips provides fittings for nearly one hundred suppliers in the mainland of China successfully.

Like Philips, Bosch, the multinational enterprise, also entrenches itself in the mainland of China and takes China as the main production base to provide products to other countries. In addition, the production line also covers several industries. But Bosch keeps the same step with suppliers with unique cooperation mode. Because of the small scale of small and medium companies and low-level management, Bosch adopts reorganization of complete production and management flow. Bosch helps company remove obstacles of the management through holding the company’s share. Therefore, the company can meet the market demand for Bosch fittings in greater degree. But this mode is unacceptable to many companies. Of course, it not only depends on luck to find a suitable supplier and keep good relationships with different management methods and evaluation standards, but also lies in understanding the real operation status of the candidate company. The candidates usually try to give you a good impression, or exaggerate their advantages but hide the disadvantages even the hidden trouble of the company operation. Referring to these seemingly awkward questions, like how to investigate, where to learn, where to begin, the professional commercial investigation company can help you make a detailed research plan for these problems.

Because of the successful commercial investigation cases in the past and different methods of cooperation, the focuses/ contents of investigation recommended by Sunfaith are also different. Besides the production quality and certification information, the emphases and depth of investigation can be classified into the followings:

It is a good way for a company to look for support from a third party---an Investigation Company. Thus you can understand your potential or current partner better and the unhappiness and embarrassment that could be caused if you ask for the information in your partner’s face can be avoided. If you are looking for suitable suppliers or have contacted with potential suppliers or are evaluating the supplier, we sincerely invite you visit Sunfaith in person and learn about how we reduce the purchase risk to the lowest point.

Disclaimer: Views & opinions are solely those of the contributors and do not necessarily reflect SIS International Inc.'s opinions, views and methodologies. Under no circumstances will SIS, it affiliates, successors or assigns be liable for any loss or damage caused by anyone's reliance on information contained in this web site. Copyright (C) 2008.  All rights reserved.