profiles of the developed Western and evolving China supply chain environments. Excellent suppliers exist in both
worlds. The average quality level in the West is higher, and
no poor-quality suppliers can survive. In China, the continuing demand from the state-owned industrial segment
where quality standards are often (but not always) lower
than Western norms provides Chinese suppliers with a
market for lower-quality products that does not exist in
the Western world. The challenge for Western companies
seeking suppliers in China is to connect with suppliers that
are aligned with Western quality and performance expectations. Chasing low prices exclusively is almost never the
right approach to assure compliance with a Western company’s quality needs.
FOUR KEYS TO SUPPLY CHAIN SUCCESS
Based on decades of experience working in China and guiding Western businesses as they establish and manage supply
chains there, China Centric Associates has identified four
keys to success in supply chain management:
1. Execute an effective supplier-qualification
process.
2. Before placing the first order, assure
synchronization of understanding with
suppliers of all aspects of supplier-customer
“rules of engagement.”
3. Adjust your routine supply chain management
processes to the differences in the China supply
chain environment.
4. Continually test alternative supplier options
and challenge existing suppliers to improve in
terms of cost, delivery, and quality.
Let’s take a look at each of these important steps.
1Execute an effective supplier-qualification process. Effective supplier qualification in China involves more
than checking product samples, equipment, and quality
documentation. While these are effective, everyday tools in
the West, they may not be used in the same way in China.
For example, Chinese suppliers know that Western customers expect to see control charts, work instructions, and
visual indicators. However, a large percentage of Chinese
companies do not understand the importance of these
tools in effective operational management. Statistical pro-
