Identifying, Selecting, and Sourcing From The Perfect Supplier in China (Part 1 of 2)

A quick search using many of the supplier identification and matching services will easily yield hundreds of potential “matches”. Some of the sites even provide a list of so called “trusted” suppliers, where they have been “visited”, “verified”, and “approved”. There is no question that these suppliers are better of the bunch. However, there is rarely sufficient evidence to choose any of these “selected” suppliers. The best that these services could provide is a long list of potential suppliers. Unless you are blessed with unlimited resources to perform an in-depth evaluation of each supplier, the odds of finding the perfect supplier from the list, unfortunately, are slim. To improve your chance of sourcing success, here are some methods to help you to navigate through the sea of suppliers:


Identifying Suppliers:

• Define the company’s sourcing “value”: Whether is it low cost, high quality, high technology, willingness to invest in technology, future expansion plan, company size…etc. One can refer to the global procurement strategy to determine the sourcing target for your industry. In theory, all requirements stated are “important”. However, using a score card to determine the sourcing value, it will make selecting suitable suppliers a lot easier.
• Determine the area best suited for your source: Good suppliers are scattered all over the world. You could spend the next life time to visit each of them. Again, it is best to have a global procurement strategy, and focus on one area to fulfill your procurement needs. This will not only minimize the sourcing efforts, but also reduce the logistics cost.
• Start with a LARGE pool of suppliers: Once a location has been defined, establish a long list of suppliers. Some of the common methods are: Internet, word of mouth / reference, trade publications…etc. You can also solicit from your current supplier base for potential suppliers. The goal of this exercise is to force your sourcing department to look “outside the box” in search of the most suitable suppliers.
• First pass evaluation: Match the pool of suppliers against the company’s sourcing value. This could be done using phone interviews, online surveys, site visits, or sales presentations. The goal of the first pass evaluation is to narrow down the large pool of suppliers down to a manageable group. Depends on the size of the sourcing project, and the associated monetary value, it is appropriate to narrow down to about 5 to 20 suppliers.
• Call up the suppliers: Email in general is the tool of choice in United States. In China, however, it is best to call up the sales, or the general manager, if the contact information is known. Introduce your company to them to gauge the interest level. I can’t usually stress enough that even with technology nowadays, a human voice, or putting a face to a name, is an important aspect of conducting business in China.

Now that you have identified a group of potential suppliers, it is time to select the best of the bunch. We will discuss some of the methods used to successfully source in China.

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