Location and Qualification of Global Sources

Tony No, C.P.M., A.P.P. Supply Chain Manager Carlisle Coatings & Waterproofing, Inc. Wylie, Texas

My Background

Worked in the Profession for 29+ Years Spent much of the last 15+ Years with Global Sourcing involvement

Traveled to 30+ countries, so far, looking for the best source

Points to Cover

Where do We start? Locating the Right Source Qualifying the Right Source

Where to Start?
Identify your Target Product taking into consideration:
Delivery Sensitivity - to what degree? Customs or Duty issues - special tariffs, quotas, import or shipping restrictions Labor Content versus Material - for some countries the savings value is in Labor only Raw Material Origin - is there an advantage in this region? Volume - are you shipping full containers by weight or volume? Is Packaging available in target country to match your domestic package? Is your Market Sensitive to an Imported Product? For Better or Worse?

Where to Start...

Establish Target Pricing and Quality Specifications

Target Prices should be for Delivered Product at your dock and include: Piece price freight duty custom broker carrying costs for higher average inventory levels travel to source, annualized cost average Special issues? NAFTA? http://www.nafta-customs.org/engfram.html How much Savings will make it worth it?

Where to Start...
Develop Detailed Quality and Performance Specifications
These should mirror, not higher or lower than the domestic specifications you buy from Today. They should be detailed to include what tests you want performed at the shipping point. This may be more than you require of a domestic source, due to freight and time issues. Specifications must be clear and not culturally weighted. This should be a question asked early and often to avoid wasted time on both parts. Using International Standards for Materials specification is helpful, if available and familiar to your source.

Where to Start...

Last but not least, Management Support

This is critical for Long Term Success. Management must agree and understand: This is not a Quick Fix, it could take time to settle on a source. This may require a Little More Time to keep working. Travel to the Source before and after the selection will be needed.

Locating the Right Source

Use Experienced Colleagues from NAPM

Look for Others in the Local Association who have been there Look for Others buying Similar items who have tried to source Look to National for Others who have the experience

Hard Copy and On-Line Sourcing Guides Embassy and State Department Sources

Locating...Hard Copy & On-Line Sources

Hard Copy Foreign Sourcing Guides

Asian Sources - Specialized Versions Korean Goods Thomas Register - European Edition

Most are Subscription and Arrive Monthly

Asian Sources has a CD each quarter with links to e-mail and on-line of sources if available.

On-Line Examples include...

Locating...On-Line Examples...

http://www.asiansources.com http://innovalue.cetra.org.tw/ http://www.manufacture.com.tw/ http://gcc.net/gcc_frames.htm/ http://amoweb.com/ http://eckorea.net/ http://www.tremnet.com/

Locating Government Help

Our Government State Department - Business Development For Information try:

http://www.odci.gov/cia/di/products/hies/index.html

Their Government Most Embassies and Consulates maintain a Business Development Office, call them and ask for information Some have on-line presence:
http://www.ktnet.co.kr/enghome/

Qualifying the Right Source

The single most important aspect of Global Sourcing Success! First, qualification step is the quotation process.
Are the sources responsive? Do they understand your specifications and needs? Do they have current stateside customers they will provide you with names for reference check? Are they timely in their responses? Do they have samples of similar parts they have produced they will send to you for examination? Do you feel they understand what you are after?

Qualifying the Right Source...

The Second Step, after pricing and verbal promises are settled is travel for Face to Face discussions.
Language, Culture and Mutual Understanding, or Lack of it, can best be bridged by Face to Face meeting. First choice should be at the producing plant to see what is happening for yourself. Examine the facility and the parts being produced. Meet the people who are critical for your success. Look for the weakness and strength, that help or hinder the project. Examine Test methods and Equipment, can they do the job for you?

Qualifying the Right Source...

Remember anyone can make a sample? Do they handle the volume you need each month today? Who to? Do they have excess capacity to handle you today? Why? Your trip serves many purposes, the most important is to show the Supplier You are serious about this business, and to assure you they are also.

Summary

Target the Right Items for Your Business and Theirs. Have Realistic, but Aggressive, Cost Reduction Targets. Have Complete and Realistic Specification for what you need. Research the Supplier Do Global Sourcing for the Right Reasons.

Best Wishes for Global Sourcing Success!!