Successful sourcing in China using the START model

START model

“Catch the goat when it’s passing” is one of my favourite Chinese sayings, and it is particularly apt when you’re looking to source new products or materials in China. Even after conducting thorough desk research followed by a tough supplier interview, you might still be surprised when you actually visit the supplier’s showroom. Once there, you might find ‘additional core products or materials’, some of which may be quite far removed from your enquiry itself.

Some years ago, I was searching for a supplier of glass carafes. And to be honest, my glass expertise and knowhow was very limited at the time – actually, close to non-existent. So I conducted a thorough and detailed search from my Danish desk – starting from the top and narrowing the potential supplier portfolio down to five or six, which I could then visit on-site.

After countless hours, a long flight and an even longer drive, I was standing in a supplier’s showroom in China’s Shanxi province. There, I learned that the proclaimed core competence was evident in just two (!) products. The thousands of other products on display ranged from brooches to ashtrays to coloured ornaments – in other words, very far removed from a glass carafe in terms of both materials and production processes.

And what did that tell me? That’s right: that I had not yet found my supplier for the job, and that this supplier had very little experience in producing the product I wanted to source. I guess that explained the very low price and minimum order quantity (MOQ). The supplier simply had no idea how to quote a realistic price, since the actual production cost was a complete mystery to them.

Needless to say, by then I had spent (or actually wasted) a lot of time and money, since this specific supplier could not do the job and I had still not found a solution for the production of my carafes. Frustrated about this wasted effort, I developed the START model. This model quickly reveals whether you have found the right match and whether the supplier in question is a realistic choice for your product. In other words, the START model increases your chances of succeeding in China!

The START model

(S) Skillful workers – A supplier might confirm they have the necessary machinery, but do they also have skillful workers to operate it? If the machines have dust on them, something tells me that they are not used very often!

(T) Technical knowhow and expertise – If you send the drawings to the supplier but don’t hear anything back, you should be worried. No questions usually means that they are not completely sure how to read the drawings, let alone produce what is on them. Match this with a cost breakdown to increase the certainty that you are receiving a realistic price and production plan.

(A) Approach – Does the supplier seem interested in you or do you have to push for replies? And who is your contact person?

(R) Reference list of clients – The perfect scenario is to have a list of the supplier’s other clients. However, sometimes perfect is not achievable. In that case, ask for pictures from inside the factory. Which other brand names can be found on-site? Or ask which other countries the supplier exports to. This will also tell you something about the quality level, and let you know what kind of competition you have. If you think that you are competing with another European client for the supplier’s attention but it turns out to be a Chinese domestic client, you need a totally different game plan.

(T) A 10-minute (or even 10-second?) sample room test – Visit the supplier’s showroom, preferably the one located at the factory rather than in some fancy office building. If that is not possible, ask them to send you photos. They say a picture is worth a thousand words, right?

Using this model will definitely increase your chance of doing business in China successfully. Best of luck with your endeavours – and see you out there!

Heidi Larsen, the Supply Chain Princess of Plus 7