Purchasing

Walter E. Buczynski, CPSM (Certified Professional in Supply Management)

Outsourcing and Sourcing Alive and Well in China
October 31, 2007

I was the Chairman of the Excellence in Sourcing and International Procurement Organization Management conference in Shanghai on October 25/26.  From the attendance, speakers and ideas, many new Sourcing offices are still opening in China. This conference had many French, German, and other EU countries. Companies in the truck, train, and other vehicles markets were there in abundance, as was cosmetics, medical suppliers, food processing, and other equipment companies. Many had both localization sourcing and export sourcing, in as well as supporting China operations with indirect spend procurement. Interesting in that many MNC’s have also created sourcing commodity managers for marketing and media, with Asia sourcing offices, namely in China.

So what was it all about… first and foremost was RETENTION of personnel. This has become a huge issue in China, where people move in 2 years or less. Experience sourcing professionals are commanding higher wages and will move around the country to the major metropolitan areas of Shanghai, Beijing, Shenzhen, and Hong Kong. Keeping people for 3 to 6 years has become an effort, using every skill from enhanced HR benefits to the day to day work of the local manager or purchasing director.

Second. Europeans are skeptical of using an Asia-based sourcing office, and internal marketing rises to a new level for what we call keeping our internal customer satisfied. English speaking Asian staff becomes a paramount effort, as communications is the first barrier. Many Expat managers expect to turn over the reigns of the IPO office to a qualified Asian manger, but with the ‘Job switching,’ there is a risk at the current time.

Posted by Walter E. Buczynski, CPSM (Certified Professional in Supply Management) on October 31, 2007 | Comments (0)