By Rebecca Ellinor
... at least, that’s the message from those with experience of low-cost country sourcing, outlined in our latest supplement.
If you’re going to do it well, you must communicate with your suppliers – everything from precise specifications, to lead-times, to desired innovations and future plans. And the communication mantra applies to your bosses and customers too – without their buy-in you may have a fight on your hands.
Back to suppliers. It doesn’t mean handing over all your IP, but rather taking the time to develop a relationship because it will prove more beneficial. One way to look at it, say participants at our roundtable debate, is to treat vendors overseas the same as you would those closer to home. There are a few exceptions of course – the language and culture may require a change in approach – but essentially suppliers overseas want the same things local contractors do. As one supplier tells us: “People are not performing monkeys, they need to be taught new skills for new requirements and need time to do things properly.”
Fiona Gooch from Fairtrade organisation Traidcraft, argues that it makes sound commercial sense to do business ethically by reducing risk and improving productivity. And buyers warn against simply switching to a new location when prices rise in your old base. You could spend more establishing a new operation and will have to start all over again. One approach is to develop sourcing “clusters” – buying from areas which have a lot of expertise, and therefore competition, in a given product or service. If you are looking to new regions, however, our map of the emerging hotspots may help.
And for those of you yet to source from low-cost countries, I hope the reasons for and against outlined in East versus West provide food for thought.
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