Best Procurement Process for Global Sourcing
China can make anything and you can find a lot of real manufacturer on B2B sites, such as alibaba.com, made-in-China.com, and globalsources.com, etc. But there are still a lot of people said that it is hard to find a reliable manufacturer in China, because those suppliers provide too much false information in their online shop and things are not match at they were described and have to take a lot of time to verify it. In this article, we are sharing a procurement process using by DiscoverSourcing.com for small business, hoping it can help you when sourcing produces from China market.
Step 1: Confirm the Products
The supply chain at Yangtze River Delta area specializes on manufacturing small commodities, mechanical equipment, machining parts, auto parts, small tools, die casting parts, plastic parts, stamping parts and sand casting parts, however, manufacturers at Pearl River Delta area specializes on electronic products. A list of outsourcing products helps to find the right suppliers.
Step 2: Get the Forecast of Volume
Both the unit price and shipping cost depend on the volume. If you want to purchase products from real manufacturing company directly, you should match the requirement of Minimum Order Quantity (MOQ). It is high cost to ship the product via ocean shipping if the value of goods is less than 3000USD in total.
Step 3: Check the Destination Port
No matter you delivery goods by sea or air, cost always is one of the consideration fees to import goods from China. If you are a customer from Thailand or Australia, you should find manufacturers at Guangdong and not to find one in Tianjin, however, if you are an importer from Japan or South Korea, a supplier near Shanghai can save some shipping cost for you.
Step 4: Find the Potential Suppliers in China
- B2B sites in Chinese should be the first choice for most of the agents to find products and suppliers in China. One of the famous Chinese B2B website is 1688.com, people can find lots of the factories on this website for free.
- Chinese search engines are also a good way to find some manufacturers, such as Baidu.com, google.com, and so.com.
- Yiwu Market is the best products sourcing marketplace to Yiwu purchasing agents to source small commodities.
- Attending trade shows to get the information of China manufacturers.
- Recommend by other people, such as friends, customers and suppliers.
Step 5: Select Potential Suppliers
It is easy to discover hundreds of Chinese potential suppliers, but most of them are not the one your need, such as, the price is too high, the quality is too poor, the service is too bad. So, we do some surveys.
- Release supplier information cards to all of potential suppliers to get some basic information, such as date of establishment, the number of employee, registered capital, hardware facilities, and quality management system, etc.
- Remove the unreliable supplier on the list after getting the feedback of supplier information card.
- Verify the basic information of suppliers.
- Ask suppliers for doing supplier self-assessment report.
- Choose 2~3 factories as the final potential suppliers.
Step 6: Sign Non-disclosure Agreement
Non-Disclosure Agreement(NDA) is one of the most important agreement to be signed before giving suppliers any information about your products.
Step 7: Quote for the Best Price
After getting every things ready, you can quote with the 2~3 potential suppliers. Negotiate with them and get the best price.
Step 8: Maintain Ethical Practices
It’s important to ensure that supplier were not employing underage workers or treating their employees poorly. We need to audit factories before signing a contract, especially we are looking for a strategic supplier and will place a large order.
Step 9: Visit and Audit Factories
As we mentioned above, we need to visit and audit suppliers if we are looking for a strategic procurement supplier for customer. And here are the considerations when we audit a supplier in China.
- The capacity is the most important.
- The ability of quality control.
- Ability to control costs in the long-term.
- Lead time and payment.
- Social compliance.
- Team working.
Step 10: Select the Manufacturers and Make Samples or Tooling
After visiting the potential suppliers, we will select one of them for our customer’s project. Ask some sample or material for testing before releasing a tooling purchase order due to some Chinese suppliers didn’t use the correct material as defining on SPEC , especially the suppliers from Wenzhou and Dongguan.
Step 11: Test on Trial Production Order
After customer approve the tooling and samples, we suggest customer to run a trail order. In some case, the sample cannot say anything. For example, the supplier makes 10 samples and only 1 piece is OK, and then he ships it to you. So, running a trail order before mass production can give customers some assurance when importing products from China.
Step 12: Go to Mass Production Process
After trial production approved, we will place a purchase order for mass production. In order to make sure customers can get the best quality of products, we will quality control at each steps.