China Sourcing
Overview of China sourcing
China remains the top sourcing location, although global supply chain continues to shift away from China. As the manufacturing and export powerhouse, China is still a low cost country. Althought he income of Chinese workers increased but the hour rate is still low which is only 1/7 of the US. After 40 years development, China has developed her first-class infrastructure, the largest manufacturing capacity and complete modern industrial system. In many categories, it is impossible to ignore China. Because Chinese manufacturers have already occupied 70-80% capacity in the world or even larger. In the foreseeable future, the world might do not rely on sourcing from China so heavy, but will still be the top position. If you want to read more about the macro profile of China sourcing, you could click global supply chain (China).
Our philosophy of Sourcing
If whole procurement process is collect honey and carry back to hive by bees, what Shanghai Lezon sourcing doing is like a scout bee. Where to find the honey? The Research segment. How to get the honey? The Planning segment. Is the information correct and source is safe? The Verify segment. How to organize worker bees to collect and carry the honey back? The Perform segment. How is the honey back to hive, can we get better ones?The Improve segment.
Shanghai Lezon intends to provide the services to cover full life cycle for procurement, from ‘source to pay’. Guide and secure each steps of your sourcing from China. Read our category expertise
How we started China Sourcing?
Decade of years ago, Mr. Zhan started his role as the China sourcing team leaded in a mid-size European company. He introduced the category management methods which are the key methods in regional procurement management into China sourcing. Although there are more challenges in China sourcing compared with regional procurement. For example, the cultures are different, the delivery of cargo need to cross the borders, but Mr. Zhan achieved great success. Compared with the similar China sourcing office, Mr. Zhan’team just has 1/3 employees but achieved similar business volume with better performance. The efficiency of these China sourcing methods have already been demonstrated in several companies, whether the company size or industry. Because of the previous success in Mr. Zhan previous career, Shanghai Lezon Consulting always seek for new ideas and tools for our ‘continues improving’ target.
Our Methodology of China Sourcing
In Shanghai Lezon, we have three result-driven objectives, ‘cost’, ‘quality’, ‘risk’. Correspondingly we have our process-oriented tools, ‘cost model’, ‘quality management’ ‘risk management’. We use the tools cross our whole China sourcing process.
The part of 'The science' in China sourcing
We could use our own AI tool to analyze the market situation including the up-stream and down-stream markets.
We have more strict internal quality management system. Meanwhile, Our experts understand the manufacturing process as well as the quality management. In many categories, we can do better than top third-party quality management companies.
We have strict risk management system to control the financial risk and EHS risk. Furthermore, we develop our digital tools to monitor the financial risk of the vendors.
'The Art' part in China sourcing
Sourcing is a job of cooperating with people instead of handling a machine. Therefore ‘communication skills’, ‘business acumen’ are also very important to China sourcing. A famous proverb ‘As water retains no constant shape, so in warfare there are no constant conditions’. (The Art of war-Sunzi)Similarly, we believe there are no certain ways for negotiating and bargaining.
Only a small percentage of business negotiations that concern only one issue, such as price, can indeed be viewed as win-lose negotiations. However, business negotiations involve multiple issues which can be viewed as distributive negotiations. As a result, these so-called integrative negotiations give parties the potential to create win-win outcomes, or mutually beneficial agreements, to get the largest potential benefits.
Therefore, Shanghai Lezon required our sourcing experts to have the excellent communication skills, business acumen and our team have the know-how knowledge.
Our steps for China sourcing
Shanghai Lezon consulting has 5 sourcing units to guarantee the performance.
- Research — In this stage, we would analyze the requirement of sourcing first. After that, we will achieve the supplier market investigation and contact with the potential vendors.
- Planning– In this stage, we would evaluate the potential vendors. In the meantime, we will discuss technique requirement and commerical terms with potential vendors.
- Verify– We would support the sampling, sample delivery and on-site plant audit(or remote).
- Perform— Cooperated with the client, we would make the purchasing stategy. Meanwhile, we would support the contracting, logistics and troubleshoot.
- Improve–Regularly, we provide the vendor performance and support continues improving.
China sourcing consulting services
Shanghai Lezon Consulting Co., Ltd could provide variety of sourcing consulting service to meet the clients’ requirement. We have other short-term services based on hours for each procurement units. The lowest hour rate could be USD80 per hour. And the long-term cooperation plan to support your China sourcing business annually. We charge the long-term service fee based on fixed cost or fixed cost plus commission. The lowest commission rate can be 0.5%. To learn more about China sourcing consulting. The cost will be varied according to the category and the business volume, you are welcome to contact us.
Why Shanghai Lezon is special in sourcing?
- Sourcing and Research
We have full sourcing channels both online and offline to search for potential suppliers. Furthermore we have digital tools to support supplier market investigation, and analyzing market trend.
- Manufacturing and quality management
In order to evaluate a manufacturer, we do not only need to check the certifications, but also need to have the knowledge behind of the documents. Besides the certifications, the advantage and disadvantage of the technology, production capacity as well as sustainable supply ability are crucial important.
The knowledge of quality management (such as ISO, GMP, HACCP) are very important for China sourcing. Meanwhile, our experts also have manufacturing management and industry knowledge. Therefore, we are able to find out the real ability of the manufacturers.
- Supplier relationship management
Supplier relationship is one of most important factor in the sourcing from China. Being local experts, we understand the business culture and customs are different in different regions and industries. In order to maintain the supplier relationship in more efficient ways, Shanghai lezon developed her own SRM. In the meantime, we also cherish the ‘humanity’ factors of supplier relationship. We always respect, care our vendors.
- Procurement strategy and contracting
Depends on decade years of experience, Shanghai Lezon Consulting is good at selecting right suppliers and making the best procurement strategy. As a know-how consultant, we know how to sign the contract and protect the benefit of our clients.