13 March 2008 | Rebecca Ellinor
China remains an excellent sourcing base, despite rising costs, says IBM's buying chief.
In an exclusive interview with SM
, John Paterson, vice-president and chief procurement officer, said: "It's true that on the eastern seaboard there's been wage escalation but when you look at the country as a whole, there are enormous opportunities to source and sell. There are 1.6 billion consumers who are getting richer by the year. If you take a medium to long-term view of life it would be hard to convince yourself that you shouldn't be here."
Paterson moved to Shenzhen, south China, 20 months ago when his office relocated from the US. He oversees procurement for internal customers and external clients who outsource purchasing to IBM.
The motivation for the move was two-fold: to accelerate the development of Asian-based suppliers who could support IBM on a global basis, and to develop buyers, enabling them to help vendors progress. "We've made significant incremental investment in the development of our people here including sending 15 oversees on assignments for up to 12 months. Twenty months ago all our executives in this part of the world were expats, now about 30 per cent of them are local. By the end of this year - if I have my way - 60 per cent will be local."
He said being in China made a huge difference when dealing with local suppliers. "The environment here is dynamic. I don't think you can be in tune with that change and be successful if you visit once every three months. Being here sharpens your awareness of what's going on in the market." Full interview in SM 10 April