Last week I was invited to speak at the Sourcing Shift conference in Hong Kong. And the first two speakers described a very interesting case study: how the Kingfisher group (owner of retail chains such as B&Q, Castorama...) is re-organizing itself to respond to competition and to cut costs. Amazon is starting to have an impact on the do-it-yourself home improvement market in Europe. Other actors have been quite aggressive too. In response, Kingfisher looked at other strategies that … [Read more...]

Many fabric mills have closed, as part of Beijing's anti-pollution inspections: Some of them were operating a dying and/or printing process without a license Some had a license but but were found noncompliant with the current regulations The manufacturing of the base raw materials (the oil-based fabrics, the dyes, etc.) has also been affected by the new environmental policy. What does it mean? Less supply for the same demand of fabric for making apparel, home textile, and other … [Read more...]

Many importers lament that Chinese suppliers don't take any responsibility when quality issues are found after shipment. Ten years ago, I would have confirmed that it happens less than 0.1% of the time. These days, it seems to become more common. I talked about this with a client last week, and here is what came out of our discussion. I listed 5 ways to increase your chances, as a buyer. 1. Work with a manufacturer Again, ten years ago, I would have suggested to work with a trading company … [Read more...]

I have recently published the 15-part series for new buyers who are starting to work with Chinese suppliers (and for more experienced people who want to double-check whether they are working in a smart way). The 15 articles are listed below: Do You Need a Sourcing Agent? How to Identify Potential Suppliers? How to Verify a Manufacturer Second Choices vs. “Never Again” Negotiation: The Terms you Need to Discuss Keep Some Leverage with Suppliers Pre-Production: Describing … [Read more...]

Up until now, I have written advice that is targeted at certain types of importers. I call them the “hands-on buyers”, and I know them well because many of them are our clients. They tend to follow productions closely. However, let's not overlook a good half of the buyers -- the “hands-off buyers”. My point here is really this: there is no one set of “best practices”. As far as importers are concerned, there are at least two types of buying strategies that can make sense. First, let’s … [Read more...]

Up until now, I have written lessons about “hard” issues: screening suppliers, writing specifications, negotiating the right terms, and inspecting quality. But I feel I should take a moment and focus on “soft” issues, and in particular, how to build good rapport with suppliers because it is so important, while at the same time so difficult to get right. First, let’s look at what specialists call the “inner circle” and the “outer circle”. 1. Some background: the inner and outer circles I … [Read more...]

It is coming again. Chinese New Year (CNY for short). All Chinese manufacturers will close sometime in early February and re-open slowly toward the end of the month. The more they rely on migrant labor, the longer the break (on average). If you are a seasoned importer, you know how to manage the disruption. This is not what I am writing about today. This year comes with an extra risk: closure of the business because of environmental non-compliance. Many factories have been completely … [Read more...]

Are you frustrated because a Chinese manufacturer has proven unable to meet your quality standard? Do they keep making promises of imminent improvement? And are you seeing no improvement? So typical. I have had several discussions about this topic in the past week, so I thought I'd write about it. It reminded me of an 'oldie but goodie' article -- The Focused Factory by Wickham Skinner. Skinner wrote this about US factories in the 1970s, and it is quite applicable to what we see in … [Read more...]

One recurring theme in this course is that you should not rely on the supplier’s salespeople. Most of them would have been hired solely on the basis of their English skills. They are interpreters with very little technical knowledge, and they are not project managers. There is actually no proper “project manager” in 99% of Chinese factories. So, who should manage the orders? The bad news is, it’s the buyer’s job. The good news is, it’s not necessarily much work. Why the buyer … [Read more...]

Expats living in China tend to be bothered by many aspects of the local culture. Here are a few common questions I was asked many times: How can they be so self-centered and so unaware of what happens around them when they drive, walk, etc.? Can you believe some factories even make fake eggs and fake rice?? Why are they so cynical about what we consider 'best practices'? I just finished a book that lists and dissects a long list of these Chinese tendencies that we find … [Read more...]