Guideline for the Development of Chinese Suppliers

For engineering goods the bought-in part costs represent a big share of the overall production costs. Facing increasing global competition, many German engineering companies identify low-cost sourcing from China as one of the remaining levers to reduce costs. But shifting purchasing volume to China requires in general the development and improvement of new suppliers. In order to do so, what methods do exist? How do they match the specialties in German buyer Chinese supplier relationships? And, what can be done to boost the results? Based on the state of the art in literature and in concerned companies, the author Matthias Vodicka analyzes the current approaches and illustrates their strengths and weaknesses regarding their use in China. An adapted Balanced Scorecard is designed, which, including the identified drivers of success, aims for the improvement of the buyer supplier relationship itself. With this, a strategic guideline and an action plan can boost the outcomes for both parties. This work addresses companies which are (or plan to get) involved in China sourcing activities and those, who are generally interested in the issues occurring for Western companies in China.