Participants
To see the list of participants click here.
Agenda
2:15--2:45: Registration
2:45--2:50: Introduction by the Chairman of the Working Group
2:50--3:15: Introduction by Max Henry, Founder and Executive Director of China Supply Chain Council
3:15--3:55: Presentation by Olivier Levy, Managing Director of Dragon Sourcing
3:55--4:10: Coffee Break
4:10--4:30: Presentation by Mr. Tom Xu, Global Sourcing Asia, Senior Production Technical Manager
4:30--5:30: Roundtable Discussion
Discussion points
1. Problems that IPO’s in China are facing nowadays:
- Long time to set up, shortage of professionals to work in the IPO;
- Hard time finding “quick wins”;
- Increasing production cost due to increase in cost of raw materials, HR costs, change to VAT refunds, RMB appreciation pressure. Increased production cost subsequently leads to a 8-15% loss (from about 30-40% saving that IPO brings to HQ);
- Quality is still a problem;
- More pressure for Purchasing Managers to work with “green” suppliers;
- Chinese suppliers improve their quality and become international and become their direct competitors.
2. Resistance from HQ when purchasing in China due to difficulties with suppliers, assurance of quality, cultural differences and communication problems. One of the participants suggested that another reason for HQ resistance might be that the employees of the company abroad are worried they will lose their jobs (if the IPO is very successful).
3. Identifying real orders from the so-called “price checking” or “benchmarking” orders;
4. Working with the only available supplier when purchasers have no choice and having to accept their terms;
5. Is it worthwhile for a company which operates in China, but does not have an IPO here yet, to establish one?
6. Advice for IPO’s in China on how to stay afloat:
Business Units should be made accountable for making full use of the IPO;
IPO Managers need to spend more time overseas and communicate with HQ on a regular basis;
IPO Managers should be more proactive; initiate projects, which they can propose to HQ;
Purchasing Managers should become salesmen;
Offer more specialised and tailored products;
Outsource smaller sourcing companies.
The next meeting of the Sourcing Working Group will be held on December 7th.