The benefits of sourcing in China are not what they have been in the past. The price of labor is growing and at the same time prosperity is increasing, but there are still significant benefits in China, and especially in other Asian countries who have not experienced the same growth.
For many companies, an analysis often includes an extensive relocation of the labor-intensive part of the production. However, to embark on the big Chinese adventure without a parachute is not to recommend, and forcing a relocation can be extremely risky.
Therefore, we often recommend our customers to start their outsourcing process by increasing raw material procurement from China, and for many companies – if production is not necessarily suitable for outsourcing – it can be by increasing raw material sourcing from China as a step to ensure the company’s competitiveness for some time to come.
Increased purchasing or sourcing of raw materials and intermediate goods from Asia will reduce production costs significantly for many small and medium enterprises. Furthermore, the costs associated with restructuring of the existing sourcing channels are often very manageable.
At the same time, the company makes a quick profit, gains increased competitiveness, and allows time for structured consideration in the next steps in the outsourcing process.
- For many companies, increased commodity sourcing from Asia provides a quick and immediate benefit in terms of reduced unit costs. It can be significant, depending on the raw material savings, and very often 20% – 40% compared with the price level from the existing community-based supplier base.
- The company teaches China and the Chinese suppliers what to know.
- The “fast” gains in terms of reduced unit costs gives the company tranquility and time to plan a structured outsourcing process.
Please feel free to contact us for a no-obligation meeting and let us help you evaluate your options.
Contact China Outsourcing Company on +45 60853500 or send an email to email@example.com