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Supplier Audit & Analysis
Many people seem to accidentally enter China versus choosing an intentional strategy. At some point it is important to do a ˇ°reality checkˇ± and put an honest analysis to what exists and how it can best serve a comprehensive China Strategy. If you have existing vendors in China, the recent tax changes have had a significant effect on their operations and their price structure. Let us evaluate this and other operational aspects to help provide a baseline for future goals.
Let us provide the following:
- Supplier capabilities:
- Access to capital and scalability.
- Legal structure, FIE (foreign invested enterprise), SOE (state owned enterprise), WFOE (wholly foreign owned enterprise).
- Special permits or operational advantages (plating, CCC (China compulsory certificate, export quota's).
- Information systems (ERP).
- Quality systems and adherance
- Approvals, ISO, TUV, QS.
- Management structure and training capability.
- Physical plant and access to facilities.
- Vendor strategic plans.
- Vendor supply chains and reliability.
- Capacity utilization equipment, people, plant
- Vendor impact of recent VAT (value added tax) changes.
- How is VAT rebated both percent and timing of rebate?
- Is product directly exported or through a trading company?
- Frequency of rebate applications?
- Examine alternative strategies related to each vendor. These would include but not be limited to:
- Company owned trading company (FICE)
- Purchases in RMB vs. USD
- Value add of imported materials (bonded manufacturing)
- Logistics management
- Examine operational strategies and opportunities.
- Partial load consolidation, examine current practices.
- Order frequencies and efficiencies available.
- Opportunities to move supply chain value added to China and lower cost.
- Shipping agreements.
- Foreign exchange risks.
- Review existing supplier agreemens and make suggestions.
PRI's China Supplier Ethics Policy in English and Chinese
Have Us Contact You
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