subject: The Positive and Negative Sides of Sourcing in China [print this page] The Positive and Negative Sides of Sourcing in China
With the world's economic turmoil, almost all business even the import export business are compelled to discover innovative ways of making and improving profits. Bereft of trading company assets, scaling back the business or shutting it down, companies must create solutions to keep it going. They have to explore fresh new methods of minimizing the costs so the business will become more profitable and compensate for their decreased sales. Aside from cost-cutting measures, the company could also lessen their selling prices and boost its sales. Reducing its employees, cost cutting measures, assessing the supplies and manufacturing costs are really given consideration.
The operations and resources should be reviewed so that the company can see what areas need to minimize its costs. Outsourcing and importing products from China is a good solution. Today, China has managed to become one of the world's largest manufacturers. China's greater manufacturing abilities make it manufacture products in a shorter period of time. In turn, the transmit time will not take too long and will be able to reach the market earlier or exactly on the specified dates. A lot of goods (e.g. packaging materials, chemicals, casted parts, etc.) are always reasonably priced to source from China compared to other countries. With less expensive labor and overhead costs, importation of products from China is actually cheaper than having these products manufactured in other superpower countries. Despite of the ever-increasing China export tariffs and cutback of rebates, China's import export business is flourishing.
Nokia of Finland, the ABB Group of Switzerland and Microsoft USA are one of the manufacturing giants who chose to have their products produced in China's manufacturing facilities. For the past couple of years, more capital and technology have been brought together to make China's manufacturing industry stronger.
If you think china sourcing is only about purchasing finished goods, think again. It also involves the buying of parts and components necessary for the production process of the various manufacturing facilities in UK, US and Australia. Take the Ford Motor Company of Australia as an example. A lot of its components, most especially the accessories, are sourced from China. But the highly sensitive components like the brakes, engines, and auto assembly are situated in 3 Australian manufacturing and assembly plants. Companies do source some parts from China. But some of their parts are still sourced from their home base because they want to see that the technology being used is reliable and quality is guaranteed. Even though it's quite costly, they would rather do it for the sake of technology and quality and these have been preventing companies from moving to China. Obviously, the downside for companies importing from China is actually the geographical location. It's hard for the companies to actually supervise the production of their products. In turn, many become doubtful about the quality of the goods, especially when it comes to the food and pharmaceutical industry. Outstanding quality and safety of the products are fundamental in the international product distribution. So, it would be best to have someone stringently keep an eye on the manufacturing process. If not, you could also hire an independent quality tester to make certain that the right standards are met.
Whether it's the negotiation or ordering process, it's best to have an import export guide who will be with you. This ensures that manufacturing information and quality standards clearly discussed. A successful import business is not only about plain importing of goods from China. It also requires that you oversee if the products you've imported are subjected to the country's standards
