China: big influence on buying

9 April 2008
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10 April 2008

Just under half of buyers already source from China or plan to in the next year.

According to the latest SM poll of 100 purchasers, 60 per cent do not source from the country, while 36 per cent do, and a further 4 per cent will start to in the next 12 months.

And even those that do not buy directly from suppliers in the country agree that many of the products they purchase, such as IT, electronic equipment and office supplies, originate in China.

Some buyers had been sourcing from the country for longer than others and there were indications that although purchasing in China had become easier in the past decade, its dimensions were changing.

According to Dominic Jephcott, managing director at sourcing and procurement company Vendigital, which has been sourcing in China for seven years: "The situation is changing rapidly with legislation and commodity and labour costs affecting sourcing benefits, but there are still great advantages to be had."

A few buyers said they had suffered problems with Chinese suppliers, with issues including poor quality, late deliveries and vendors not following specifications. But, they argued, suppliers were learning quickly and likened development to that of Japanese and Korean suppliers.

Buyers said the main reason they did not buy from the country was because their spend was on services that can't be bought from China. But some still had reservations about the political, ethical and social issues raised by sourcing from the country. One buyer argued that unless the UK and Europe could return to competitive manufacturing this would not change.

Others added the country was becoming uncompetitive and they had already started to look for the next low-cost sourcing location.

Buyers were urged to take advantage of local talent and ensure specifications were clear if they wanted to make a success of buying from the country.

SMapr2008

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