Sourcing in China: Start with ‘Good’ and Make It ‘Great’

A lot of companies struggle when developing a buying program when sourcing in China. It’s an uphill battle to create a sourcing program from scratch, one that will work and continue to deliver.  So much so that, by the time they manage to get their sourcing program to a good level, there is a strong temptation to think it is ‘good enough,’ and so they leave it at that, and don’t struggle anymore to make it better.  They certainly don’t think it’s worth the effort to make it great.

So many rationalize and reasonably think that there is no point being a perfectionist, that “if it ain’t broke, don’t fix it,” etc.  What is the point of doing more when you can live with less, right?    There is some logic to that, except, of course, when you hit a crisis.  So the question becomes: “how likely are you to hit a crisis when sourcing in China?”   Savvy importers know that such a crisis is usually a matter of “when”, not “if”. And that when a crisis hits, it could leave your China sourcing program in shambles – or worse.  Some people we know have lost millions due to poor China sourcing management.

But what if there was a better way? What if you didn’t have to settle for a China sourcing program that was merely ‘good enough?’  Would that make you stronger?  Would that make you grow, beat your competition, overcome your difficulties?  Would that effort be worth it?

After years of sourcing in China, importers accumulate experiences that translate into lessons learned. Lessons that can be used to build a strong foundation – resulting in an improved China sourcing program. However, in our experience, once importers create a system that works and delivers, even if it is mediocre, they very seldom change it for the simple fact that, well, it works.  (Or at least it worked well then, with the products, the people and the factories at that time.)

We also know that the world is changing. Fast. All the time. Disruptively. And we all know that in order to grow, personally or professionally, we need to stay ahead of changes, we need to be uncomfortable. We need to branch out, try new things, and adjust a thing or two. This plays an integral part of success when sourcing in China, if your intent is to take a good sourcing program and make it a GREAT sourcing program.

So how to take a good sourcing program and make it great?  Here are a few ideas:

• Re-think everything from scratch. Do a SWOT analysis (Strengths, Weaknesses, Opportunies, Threats). This will identify the issues you have with sourcing from China and reveal what areas you can improve, and how.
• Sourcing team: Invest in a sourcing team. People who know the culture and the language – and are familiar with the products that you’re sourcing in China. This can add tremendous value to your program.
• Benchmark and compare: What are your competitors doing?  What are your customers doing? Do you have the best factories?  How do you know?
• Create procedures, a management system: Sourcing in China can be a major management burden. To lighten this burden, put processes and procedures in place to help things run more smoothly and to align your China team’s efforts with your own vision.

Jim Collins famously said: “The enemy of great is good” but improving your sourcing program doesn’t mean you have to start from scratch and throw out all the work you’ve done to create a new way. Instead, take stock of what you already have and ask yourself: “what do I need to do to improve it?”  What would be my ideal, my ultimate China sourcing solution?

Have you read Jim Collins’s book?  If not, we recommend it.  And you may want to also check out Gino Wickman’s Traction to learn about practical management systems that work long distance.

What are your views on “Good to Great”?  Do you think the effort is worth it? Does your sourcing in China program deserve this kind of attention? What improvements would you make to your sourcing program?  Let us know what your thoughts are in the comments below.

 

By Jocelyn Trigueros