The Growth and Development of sourcing in Asian and China
The allure of Asia’s vast manufacturing base, skilled workforce, and cost-competitiveness has prompted many European and North American companies to explore sourcing opportunities in the region. Global Sourcing from China or wider Asians markets has always been a source of huge competitive advantage for companies in many industries.
From start-ups to multinational organisations building Supply Chain to encompass offshoring has been a corner stone of margin delivery and competitive advantage. However, as more companies start to recognise and develop their Asian sourcing or Global sourcing strategies. The immediate first stage benefits are beginning to be degraded removing some of the early mover advantages.
Establishing a Buying Office in Asia can be a strategic move to enhance Sourcing Capability
Establishing a team in market can deliver significant advantages over working through an agent or trying to manage relationships directly from Head Office.
Whilst the Advantages can be huge the challenges of office space, recruitment, HR and Legal in a new country or jurisdiction can seem insurmountable and full of complexity.
ET2C International Unique Buying Office Model
ET2C International have over 23 years’ experience as Global Sourcing Experts. Our 200 colleagues are based in 7 offices across developed and emerging Asian sourcing markets to be your feet on the round. Creating your bridge to your Asian supply partners.
Many of our clients have developed their Asian buying offices with us. Taking advantage of our unique model that mitigates all the risk of establishing a new entity whilst releasing all the benefits of a team on the ground and direct supply relationships. Removing the challenges of office space, recruitment, staff isolation, HR, Payroll and Legal in a simple solution. Our teams can rapidly establish Buying Office teams in China, India, Vietnam and Turkey to rapidly take your Global Sourcing to the next level. Buying Office Model
To find our more about our unique Asian Buying office model drop us a line at contact@et2cint.com
The Advantages of Establishing a Buying Office in Asia:
The balance of benefits will be dependent on your current sourcing and procurement model.
- Cost Reduction: A key advantage is the potential for significant cost savings. Asian countries often offer lower labour costs, raw material prices, and production overheads compared to Europe and North America.
- Enhanced Quality Control: A local presence allows for closer collaboration with suppliers, facilitating improved quality control measures throughout the production process. Regular on-site inspections and communication can minimize defects and ensure adherence to quality standards.
- Efficient Sourcing & Negotiation: A dedicated buying office can identify new suppliers, negotiate better pricing based on local market knowledge, and manage sourcing activities efficiently.
- Improved Speed to Market: Having a local team facilitates faster communication and quicker response times with suppliers. This can lead to shorter lead times and faster product introductions in your markets.
- Supply Chain Visibility & Management: A buying office can provide real-time information on production progress, inventory levels, and potential disruptions within the supply chain. This allows for proactive management and mitigation of risks.
- Regulatory Compliance: Navigating the complexities of Asian regulations can be daunting. A local team can ensure compliance with product safety standards, import/export regulations, and labor laws.
- Cultural Understanding & Communication: An Asian buying office fosters better cultural understanding between the company and its suppliers. This bridges communication gaps, avoids misunderstandings, and strengthens business relationships.
- Direct Access to Asian Markets: A physical presence allows companies to explore opportunities for selling their own products within the Asian market itself, potentially creating a new revenue stream.
The benefits can be huge and wide ranging in establishing your team on the ground. The Risks are the factors holding back many companies from releasing the Operational benefits. Mitigation of these is crucial to effective implementation.
Risks to be Mitigated in establishing a Buying Office in Asia:
- Investment: Establishing a buying office requires an initial investment in setting up the office space, hiring staff, and legal compliance. Simply finding office space of the right standard can require significant time and market knowledge.
- Skill Sets: Many organisations do not have the current capability to navigate employment law, practises and legality in a new jurisdiction.
- Cultural Differences & Language Barriers: Cultural differences and language barriers can lead to communication difficulties, misunderstandings, and potential delays in operations.
- Labor Regulations & Ethical Sourcing: Navigating complex labor laws and ensuring ethical sourcing practices can be challenging for companies unfamiliar with the Asian landscape.
- Distance & Time Zone Differences: Managing a team across a significant time zone difference can pose communication and operational challenges This can build a feeling of isolation and remoteness in working reducing effectiveness.
ET2C International Unique Buying Office Model-What are the Benefits
- Local Expertise & Knowledge: Setting up a buying office requires navigating complex legal, cultural, and business environments. Companies often lack the in-depth knowledge and experience to navigate these challenges effectively. Our 23 years experience and teams on the ground in China and other Asian Sourcing markets enable us to rapidly deliver:
- Office space: Our modern office facilities ensure great working environment and the ability for your teams to network with other Buying teams within the same building. Sharing knowledge and building Insights
- Recruiting & HR: We manage all your recruitment with you to find qualified local staff, managing payroll, and adhering to labour regulations.
- Supplier Identification & Negotiation: Identifying reliable suppliers, negotiating competitive pricing, and managing vendor relationships.
- Quality Control & Inspection: Providing quality control support and overseeing production processes.
2. Faster Start-Up Time: Companies can leverage our existing infrastructure and resources, leading to the quicker establishment of their buying office and streamlined operations.
The benefits of setting up your Asian Buying Office
Moving your Global Sourcing Strategy to one with Buying Office established moves your delivery to the next level. Improving operating margins, developing faster innovation, improving quality and supplier relationships. When establishing your new office risk mitigation is crucial to ensure rapid margin and trading improvements.
Buying Office Model has been delivering benefits to our clients for over 10 years. Mitigating all the risk of setting up a team in Asian to allow them to focus completely on delivering the benefits to operating margins. To find out more about how this could elevate your Global Sourcing drop us a line contact@et2cint.com
