Etienne Charlier, at Procurasia, just had a very nice infographic designed. It is presented as a list of criteria to be followed by a company BEFORE starting to buy in China.

According to Etienne, sourcing in China is a good idea for your company if…

• You can purchase large volumes at a time
• You can afford to place orders months before getting the products
• You can find  competent manufacturer, confirm their fitness to your needs, and start production, all within a few months
• You can accept to adapt your product to the local production methods and to the materials commonly found in China
• You intend to buy products that undertook significant machining and/or assembly transformations
• You are not at a big risk of creating competitors or of getting your designs knocked off
• You want to build extra manufacturing capability, rather than replacing what you are currently making domestically

Here is the infographic:

I can think of a few extra elements:

• The decision is still economically justified if the FOB price is 20% higher in two years.
• You purchase a high mix of products. Chinese factories typically have a lower level of automation, which means higher flexibility to make a wider range of goods (within their area of competency).
• You can adopt a project management organization, and micro-manage what happens half-way around the world.

What other criteria would you add?