Sourcing In China: The Benefits and Challenges

China has one of the remarkable and well known introductions in all over the world since it is separated from the western hemisphere and now you can visit a very developed, industrial and agriculture land. After the death of Mao Zedong new economical strategies planed and the 6th five year economical plan revolutionized in China. In 1984 special economical zones were established and the main purpose of these new economical zones (Shenzhen, Zhuhai, Shantou, Xiamen and Hainan) was to attract the foreign investors for the investment in China.

Sourcing in China is not impossible but it can be a tough task for a person if he is thinking to import some products in China. It can be unrealistic because of cost estimation rate will be higher in case China is already manufacturing these goods. You must consider all the pros and cons before sourcing in China because many different countries like USA and Canada are already manufacturing there products and they are working with annual revenues of $50MM. Many companies of different countries are still negotiating with China for outsourcing to settle good deals on different manufacturing.

According to a new report about sourcing in China concluded that if western companies want to flourish there they must deal with different procurement issues as well as sourcing issues. The GDP rate in China is rapidly increased in pas few decades because of manufacturers. Many different manufacturers are thinking to reduce the supply chain of their products especially beverages and food items and want to sourcing in China because of preferential tax rates on drivers and unfavorable economical policies for them. It is highly recommended to deal with all the economical issues if they really want to be successful in China.

It is world wide problem to find quality supplier but the greater geographical distances make it more difficult for the manufacturers. The main problem of many companies can be the supply on time during sourcing in China. Another biggest barrier to sourcing in China is the biggest size of country. The long distances even with in the country can create hurdles in supply chain of products so that the company has to maintain large records and spend a huge driving cost. As a result the inventory and logistic cost in China will be raised. So that all these risk of suppliers, unrealistic cost rise and adjustment problems must be solved with dealing and cooperation. The author of the report concluded that those companies are getting advantages who are working with low cost purchasing and they already analyzed the cost estimation.

Many companies in China are using different sourcing agents which are very much skilled to handle different types of complex product categories, fragile material and have restricted right to the specific factories. A report on Responsible Supply Chain Management in China suggested that if the western investors really want to be successful in China for sourcing must be hire some very experienced, well trained persons, they must have complete information about the local business practices and sourcing rules and regulations. Many companies like Israeli-based soy proteins specialist solbar are preferring to establish operations in country for their product sourcing in China. It is hoped at the end of this year company will start processing soya at Ningbo Free Trade Zone, southeast of Shanghai.

Despite of all the sourcing problems in China, the demand of sourcing at China in increasing day by day, the main reason can be the China’s agreement to the World Trade Organization.. The main cities which are very much favorable for sourcing are Shenzen and Shanghai. Many western companies are willing to settle their sourcing centers at China. Some well known companies like Coca Cola and Nestle already having significant supply of about $ 1 billion at China packed food market. Another remarkable centre established in China is Wal- Mart which is fully functional.

All the efforts are not providing the best sourcing results in China because there is still need to negotiate, supervise and manage all the problems related to the sourcing. The solution of the entire sourcing problem is to express all the problems to the China sourcing development authorities so they can plan different strategies to give comfort to the foreigner manufacturers. The main hurdle of sourcing at China is the geographical distance which prohibits different companies to developing their sourcing plans here. Because of long distance from Developed world to China creating different problems for the foreigner investors and there is dire need to solve their all sourcing problems. Regardless of all the difficulties of sourcing in China a large number of different merchandisers and products are flourishing rapidly and providing full benefits to their investors. Although it is not possible to get all the possible advantages from the china sourcing programs especially when all the operations and procedures are not full applied.

To cope with all the challenges of China sourcing program and to encounters with other suppliers, a great management team, reliable partners, a very attractive product is very essential. Investing a little in suppliers will be the great in future.

No doubt China always welcomes the good suppliers having good strategy, planning and management for the sourcing. It is not an easy task to get maximum benefits you have to work hard to get maximum yield. China offers all possible benefits and comfort for all the investors who are providing the best services at China. China is offering and putting its all efforts to solve all the problems of different companies who are willing to invest there. A large number of different famous brand companies from different western countries are still enjoying the maximum payback after sourcing at china. So if you are planning to source in China you must analyze all the hurdles, cost estimation and distance factor and if you think you have good planning, strategies and solution of all the possible difficulties then it is not far away to delight your investment in China with a massive payback.