Manufacturing WOFE/Joint Venture Contract Manufacturing Shelter Manufacturing Our Advantage Procurement Marketing Investments	Procurement On July 4, 2004 the New York Times called China "the world's factory floor". OEM Buyers demand the "China price". What does it take to leverage China's "cheap labor" to acquire low cost goods for purchase? Purchasing from China is relatively easy. But effective Procurement from China, with both Buyer and Seller profiting appropriately, is much more elusive. Indeed, your procurement success will vary with how well you manage the following skills: Understanding a different culture with different business practices Negotiating price while understanding this different culture Assuring Quality Assuring production schedules Managing the logistics of a long supply chain Warranty Management Intellectual Property protection Differentiating between procurement for import and export purposes Maintaining relationships (Guanxi) If you need evidence that American procurement in China is frequently not done well, ask an American executive of a small to medium sized manufacturing company to characterize Chinese suppliers. Answer? Frustrated at their inability to get high quality parts, per spec, on time, as agreed. No trust or confidence in the integrity of the supplier. Love the price, but the only reason to do business is price. Ask a Chinese supplier who provides products for small to medium sized American companies to characterize customers. Answer? Frustrated at their inability to effectively communicate requirements, specifications, and expectations and follow through with timely orders. Blame the supplier for things outside his control. Don't pay honestly. No trust or confidence in the integrity of the customer. Want the order, but the only reason to do business is to get the order and get paid. Ask yourself the following questions and answer them rigorously. In our attempts to buy from Chinese suppliers, do we ... Understand that this is a different culture with different business practices? Negotiate price and conditions while keeping the culture differences in mind? Know how to assure Quality? Know how to assure production schedules? Know how to manage long supply chain logistics? Know how to do warranty management? Know how to protect Intellectual Property? Know how to differentiate between procurement for import and export purposes Know how and have the resources to maintain relationships with Chinese suppliers (Guanxi)? If you are looking for a way to minimize costly mistakes due to miscommunication with your Chinese suppliers, call us at 810 229 5677 to see how we can help.

	Chinafacturing Solutions, LLC 4465 Oak Pointe Drive Brighton, MI 48116 USA Phone: (+) 1 810 229 5677 Fax: (+) 1 810 229 5647 email:info@chinafacturing.com
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