Author: 露露

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Elksourcing：Tips for Outsourcing Procurement Activities

Apr 16, 2021 , by 露露

The marketplace is now getting more and more competitive day by day. For retaining the position, business requires adapting the ever-changing trends. It is possible only when they will concentrate fully on the core competencies. 

Outsourcing the procurement activities has now become a highly preferred option for a number of businesses, as it lets businesses to reduce hassle and keep eye on their primary goals. How to do this? Below are some tips:

1). Acquiring new skills:

The outsourcing companies which deal with procurement activities have expertise in this specific field and also possess huge knowledge in the related aspects. While purchasing products from the foreign market, many challenging situations may occur. Often handling such situations, becomes difficult for the businesses. But, as the procurement outsourcing providers have adequate relevant experience, managing these situations becomes easier. The third-party vendors are aware of risk factors that can affect procurement activities. Thus, you can take preventive actions in advance for eliminating the negative impacts. 

For procuring successfully from the foreign market, businesses need to come up with new ideas. Every business, especially the small ones, importing from the global market may not have the necessary skill to do this. In that case, the third parties are highly effective. These third parties can provide you with fresh ideas which are difficult to be generated from internal team. From these ideas, you can review and shortlist the best ones on basis of their feasibility and can implement one by one. The procurement vendors are mainly responsible for dealing with the tasks like negotiating with suppliers, handling raw materials and making purchases. However, there are some such service providers too who can help you to think strategically. These service providers can help you for assessing new opportunities and analyzing the expenditures.

2). Reducing total procurement costs:

In the case of procurement, the organizations have to deal with huge skill gap. As businesses are going beyond the boundaries of their national market, demand for the skilled professional is increasing. It is quite expensive to hire the right professionals and train them as per requirement of your business. In this case also, taking help from external expert’s would be a smart move. You only need to pay a predetermined amount of money to the vendor and it takes the charge of everything. It will reduce the cost of developing own procurement team a lot. 

Moreover, the procurement vendors analyze total expenditure for purchasing products regularly and look for opportunities to control it. The continuous evaluation process let businesses to know the areas where expenses can be reduced. The vendors also take responsibility of looking for new ways for reducing cost. For example, the vendors constantly search new suppliers so that products and services can be purchased at lower cost.

3). Accessing necessary resources:

The outsourcing service providers have long experience in this field. Thus, they already possess necessary infrastructure and other resources which are required for purchasing from global market successfully. It, apart from enabling them to finish the job faster, also facilitate to focus on existing current opportunities. The outsourcing service providers have adequate knowledge on changes in customer demand, changes in priority and other related factors. In addition, the outsourcing service providers let businesses to implement supplementary strategies such as evaluation of suppliers, developing the new product line and penetrating to new sourcing destination. Other services of outsourcing vendors which are beneficial for the long term, are the installation of procurement systems, providing necessary training to your staff and reviewing current business processes and offering strategic advice.

4). Effective identification and solution of risk factors:

When it comes to procuring from the global market, the risk is unavoidable. Every organization purchasing products from the foreign market have to encounter a number of internal as well as external risks. Therefore, it is mandatory for businesses to acquire new resources and developing the existing ones through training and other programs. It is easy to understand that the process is quite expensive and bearing the cost may not be possible for small businesses always. Hiring a procurement service provider can be an effective solution in this case. By outsourcing some of the activities, businesses can tap the best talents at comparatively lower cost. As a result, identification of the risk factors associated with purchasing from the foreign market and evaluating those becomes easier.

Involving a third-party vendor to procurement activities has a significant impact on the delivery of purchased raw materials. These service providers focus only effective purchase of raw materials, handling those materials and delivering to your own destination. Clearly, it makes the business able to get a constant supply of products in a simpler way.

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Elksourcing：Good Practices for Sourcing Products Internationally

Apr 16, 2021 , by 露露

Despite increasing importance of sourcing internationally, there are many organizations which are not aware of such practices. Below are some good practices I have learned from sourcing products internationally.

1- Know the market trends:

To source products internationally, at first, you should know what will be required and what are relevant. For instance, if you are sourcing a fashion product, it will have own demand and trends. Moreover, these trends can differ in the global and local market. Thus, before starting to source internationally, it is your task to research thoroughly. Before stocking inventory, ensure that what you are purchasing, will sell.

Bringing products to your domestic market may be time-consuming sometime. That’s why; you should keep an eye on what is new related to your product. It will ensure that you are receiving the perfect type of inventory always. Keeping an eye on the production management system of your chosen supplier is necessary to avoid the issues like outdated inventory or delays.

2- Understand your suppliers’ capacity:

In the case of overseas procurement, you have to rely on the supplier a lot. when buying some organic products, such as processed food, the order can be impacted by weather condition. On another hand, when you are supplying anything like electronics goods, then the risks caused by weather conditions start to reduce. However, in these cases, the infrastructure possessed by supplier influences the entire order quantity. Before choosing a supplier, make sure that the manufacturing unit is large enough to provide you with products of right quantity.

Analysis of the supplier’s capacity also needs extensive research. You can employ own staffs to assess the manufacturing capability of supplier before purchasing products from them. For too small organizations, where the resources are scarce, you can hire agencies for the purpose. While assessing a supplier, always try to visit the factories in advance multiple times. Only the factory visits can let you know the manufacturing capacity accurately. During such visits, be ready to ask the suppliers as any questions as you can. 

3- Check whether the quality is matching:

Matching up the quality is one of the biggest challenges for international sourcing. While sourcing globally, you have to match the quality of products offered by a manufacturer living in remote areas of a developing country to that demanded by your customers living in top cities. Clearly, the task is quite stressful. In your chosen sourcing destination, you may find a number of internationally recognizable supplier, though getting inventory from them can be little costly. If you are working on a tight budget, choose to purchase from multiple suppliers. It will also help you to get superior products in right quantity and at the right time.

Getting the sample of products manufactured by suppliers is another effective technique to assess their abilities. However, the quality of sample may not match always with that of actual products. Therefore, check the reliability of a supplier before making any deal.

4- Stay updated about major holidays: 

Every sourcing destination has different festivals and holidays. The production of your required product can remain suspended during these periods. If you do not plan in advance, such interruptions can take a serious toll on your supply chain. 

Getting products from foreign suppliers will become easier if you put yourself on their priority list. Otherwise, the suppliers may not give much importance to your order. While placing an order, provide the supplier with some information about your business or your inventory planning. If the suppliers realize that you are having long term plans, they will show more interest and serve you better.

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Elksourcing：3 Mistakes You Should Avoid for Sourcing Products from China

Apr 15, 2021 , by 露露

For being successful in China sourcing, you should have clear understandings about the sourcing process and realistic expectations. Here, the most common mistakes for sourcing products from China are listed. 

1). Absence strategic management in case of China sourcing:

The companies, just after starting sourcing from China, usually make a lot of mistakes. Some of the most common mistakes, made by these companies include- lack of adequate research, the right strategy, and benchmarking process. It restricts businesses from setting the right product quality targets. Usually, the businesses source products from the Chinese market, mainly because of the cost benefits. However, according to the professionals, involved with sourcing, it shifts the focus from purchasing quality products to saving money. The commonly made mistakes of other businesses for sourcing Chinese products can be broadly classified into the following categories-

A.  Not having a proper strategy

B.  Not having any properly defined standard for the suppliers

C.  Lack of performance assessment for suppliers

D.  Not having well-defined payment process and quality assurance model 

E.  Not having any written contract with the suppliers

F.   Not having knowledge of local market practices and laws

G.  Not working with a professional who can communicate in local language

Before sourcing from China, businesses have to know all the risk factors associated with it and how will you encounter these. Along with setting realistic targets, businesses should have a system for assessing the suppliers also, so that the right decision on the renewal of contract or making contract with existing suppliers can be taken. Staying aware of local rules and regulations as well as business practices is another thing that leads to successful sourcing. Unless an importer is well acquainted with these factors, legal issues may rise and it, later can interrupt the sourcing process significantly.

2). Not considering sourcing as a core competency:

When it comes to sourcing from China, the strategy is the most critical part. At the first stage, you have to decide, whether you are going to buy or make? In many cases, buying products from foreign countries is a more feasible option. The second stage deals with deciding whether you will purchase from a low-cost country or will invest on low-cost products. When all these questions are answered, your next task will be, preparing the organization for next sourcing project.

The modern approach that many organizations adopt for sourcing products from China is, considering it as a core competency. In other words, the entire sourcing process is designed in such way so that a number of resources and talents work together. In the case of traditional sourcing projects, more focus was given on management of transactions and ensuring the maximum money. In the contemporary sourcing model, more emphasis is given on managing the KPIs.

For improving sourcing efficiency, most of the modern importers take help from the third-party agents. Sourcing activities which are outsourced in most of the cases, include- deciding whether you will focus more on cost savings or quality improvement, managing the cultural issues and achieving organizational targets in terms of cost, quality and timing.

3). Not knowing the best practices of China sourcing:

The sourcing best practices differ from country to country. While sourcing from China, an importer requires staying updated about all aspects of it. Typically, the critical elements for China sourcing include-

1.   Product life cycle, i.e. how much time will take to introduce it, the time required for branding etc.

2.   The right time to make purchases. It means, importers need to consider season, holidays etc. to avoid interruption or delays.

3.   Cost incurred for inventory handling

4.   Cultural issues that you may encounter.

5.   Managing relationship with suppliers

6.   Timely delivery of products

Sourcing products from China require continuous involvement. Just selecting a supplier and placing your orders will not help you here anyway. Instead, you have to put continuous effort for identifying new suppliers, making favorable contracts and improving the quality of the products to get the most out of the investment.

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Elksourcing：Good Practices on Product Packaging

Apr 15, 2021 , by 露露

Nowadays, product packaging is proven more and more important, especially for retail. However, it’s always uneasy to create a unique and attractive packaging. Are there any good practices? The answer is yes. The followings are what I’ve learned from my 20-year experience in sourcing business.

1. Think of your brand

The packaging is a great way to let your brand speak. You can create a positive association with your brand by developing customized boxes and packages. It would offer a special experience for the customers to unbox the orders and find their purchased item. You have to think of your brand, business value, your target customer of your brand, etc.

2. Understand your customer

When you plan to design your product packaging, you have to understand your target customer, know what they expect from your business. After all, they are the ones who are ready to invest in your business. For instance, you are selling children’s toys, try to design your packaging with widely-known figures in the animated cartoon or fantastic playing context. This will greatly promote your sales and business.

3. Know your product size

As a matter of fact, the product size matters the packaging size. It would be totally a failure if the size of your design is not fit your product, be it larger or smaller than the product itself. For instance, the product with four different parts with different sizes should accommodate two different sizes of packages. Try to make it economic with the dimensions, and savvy with your products.

4. Consider the packaging material

When it comes to packaging, you have to know what to use to package the products. For any shoppers, they don’t want their beloved items to be housed in a wrong material box or bottles.  Just imagine the house made out of cheese in the summer. It is disgusting.

5. Don’t ignore the budget

How much you want to spend on the packaging? Normally you have to consider before you start work on it. It should depend on how much profit you’d like to make from each item you sell.  It may be a small part in your business, but you cannot ignore it. The budget should be vital for a startup. Remember to search the market, and have a general understanding of the market price, and then make a detailed and practical budget plan based on the packaging phrases of your product.

6. Prepare to design packaging

This part comes to packaging designing. This means you have to design something exceptionally beautiful on the packaging with all the info available and convince the target customer to buy the contents. Besides, you have to know the packaging types of your products. You have to be clear about your product attributes, for instances, liquid drinks should be kept in bottles instead of the box. And then you can’t ignore your budget and your website positioning. Try to make it different with a limited budget by comparing with your competitors.

7. Design your product packaging

Then it comes to the packaging design part. You have to determine the packaging layers and the type of packaging based on the product attributes. If you are not good at the graphic design, a professional designer will be the best choice for you. But you must have your own idea before you ask a professional designer to design your packaging. Share it with the designer about your brand identity, and the competitors’ packaging designs. And the designer will give you’re their idea about the packaging color, look, and feeling.

If you can design the packaging by yourself, it should be your task. You have to choose the software such as Adobe Photoshop to design a 3D packaging image to fit your products. Prior to this, you can refer to your competitor’s packaging and figure out the difference of your product. Include all the key ingredients of your brand identity and the descriptive info of the product. Try to make it unique to stand out and easy to trigger the emotional engagement of your customers. If possible, you can invite friends, families, and co-workers to give some feedback on your design. Or you show them several designs and let them choose the best one in their eyes.

8. Have your designs printed

Finally, you have to have your designs printed. As we know there are different parts of the packaging material. And you have to have them printed out separately according to your packaging requirements. For instance, you have labels, scanner code, logo, and other informative descriptions. You have to print these key brand identity ingredients with different printers. Try to communicate with the printer to get the specifications of the printer needs. If the packaging is designed by the designer, make sure they’ve discussed on that. And the printer is clear on it. Besides, the file format is vital in printing. If the format is wrong, the solution should redo the work or work on the file format. If this is the situation, your cost would likely to go up.

Take the shipping scale into account. This means you have to print your designs based on your shipping speed. You don’t have to print too much and load it there for orders. Generally, you should never stock more than half a year of packaging in case of the labeling regulation change despite some of the packaging forms keep constant for years.  And the pressure sensitive label adhesive only has a guaranteed shelf life for one year. It can lose its adhesive properties if it stored incorrectly.

9. Optimize your product packaging

From time to time, we’ve come across different packaging for the same products. It is caused by product packaging optimization in line with the time change. In a nutshell, you must have a clear understanding of the product packaging. Hopefully, you will find the above tips useful for your business. Your packaging is definitely to deliver what is your brand, and what it means to your target customers. Never miss the opportunity to create a lasting impression on your target customers.

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Elksourcing：Things to Consider When Sourcing from China

Apr 15, 2021 , by 露露

Are you interesting in finding a Chinese company to help with manufacturing your product? Doing so requires choosing a good Chinese sourcing partner to facilitate the expansion. As you begin to source internationally, here are some things you need to keep in mind.

1. Product Quality

No matter what materials or goods you’re sourcing, the quality of the product must always be at the forefront of any decision you make. When you expand into the international market, you will face issues related to time zone difference, geographical differences, and cultural miscommunication.

Each of these 3 factors has the potential to affect the quality of your product and sourcing.

Poor product quality ultimately leads to dissatisfied customers. Therefore, when searching for a manufacturing sourcing partner it’s critical to choose a sourcing agent that consistently meets or exceeds your expectations in order to build a sustainable long-term relationship delivering quality goods.

2. Logistic Capabilities

How are you going to get your goods to market? To make this happen, you must have reliable transportation. Depending on the market you’re interested in expanding to, this could be a serious issue. You need a flexible sourcing agent that is able to adjust quickly to changes in transportation logistics to move your products from the origin point to the destination. The last thing you want is your product stuck on a truck, a vessel, or some other mode of transportation, unable to reach its destination.

3. Communication

This leads to the next point,communication. It’s not just language barriers that cause a breakdown in the offshore supply chain. Sourcing agents that aren’t internet savvy, or those who fail to communicate serious issues in a timely manner affect your business. There’s too much at stake with global shipping and distribution. If you’re working with a partner who doesn’t adhere to deadlines or consistently mishandles documents, your shipment may not clear customs. When this happens, it means your customer isn’t getting their order in a timely manner, and your customer may lose faith in you.

4. Time to Market

Last, another consideration when choosing a global partner is to look at how they stack up to their competition. Are their competitors moving products more quickly while sustaining quality? If so, you need to be mindful of this because it affects your revenue. In order to sustain the global sourcing for your product, you must be able to deliver goods quickly and in great condition. Choose a partner who prioritizes this part of your business as much as you do.

Whether you’re new to custom component sourcing or you’re looking to expand into new territory, do your research and choose wisely. A well-thought-out choice makes all the difference between global expansion and global failure.

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Elksourcing：Why Quality Control is Essential to Your Business?

Apr 15, 2021 , by 露露

Quality control is essential to build a successful business, as the delivered products should meet or exceed customers’ expectations. A quality control system based on a recognized standard provides a strong foundation for achieving a wide range of marketing and operational benefits.

1. Competitiveness

The ability to offer customers quality products provides a strong competitive advantage. Quality helps you to win business from competitors who are not able to match your standards and gives you the opportunity to charge premium prices for a superior product. It can also open new business opportunities in market sectors where quality is critical.

2. Customer Loyalty

Providing the market with quality products helps to increase customer satisfaction and loyalty. Satisfied customers have confidence that your products will continue to provide reliable performance in the future, and that increases the likelihood that they will buy from you again. Satisfied customers may also recommend your products to other companies, either directly or by providing testimonials that you can use in your marketing communications.

3. Reputation

Quality makes an important contribution to your company’s reputation, particularly with the growth of social media. Customers share their views on products and services on product review sites and social media, such as Facebook. Positive reviews and comments can reinforce your own marketing efforts, but quality problems can have a damaging effect on your reputation if the word spreads. A major quality issue, such as a product recall, may also attract media attention, causing further damage.

4. Compliance

Compliance with recognized quality standards may be essential for doing business with certain groups of customers. If you are part of a supply chain, for example, the lead manufacturer may impose consistent quality standards on all members of the chain. Some customers aim to reduce or eliminate the cost of inspecting incoming components or materials by insisting that their suppliers implement the same quality system. If you operate in a regulated sector, such as food-contact products, you may have to comply with industry quality standards.

5. Costs

Quality control can help to reduce your production and product support costs. A quality control system helps to lower levels of waste and rework, cutting costs and improving productivity and production efficiency. Delivering quality products can also reduce the number of returns you have to handle or the cost of repairing or servicing products in the field.

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Elksourcing：Things to Consider before You Start Global Sourcing

Apr 15, 2021 , by 露露

The world of business has become a global marketplace nowadays. To be effective in today’s competitive landscape, businesses often have factory partners across the globe. It’s an exciting time, but it can also be a challenging time for businesses just getting started in global sourcing of products. 

 

1. Find a Global Sourcing Partner

Entrepreneurs have a streak of independence. That’s why they are in business for themselves. But a good business person will also know when to seek expertise from a partner. Global sourcing is one of those times when it’s wise to seek out a good partner because there are many unknowns. A sourcing company will steer you toward opportunities and away from pitfalls. It’s better to benefit from someone else’s experience than to make mistakes by trial and error.

2. Don’t Make Decisions on Price Alone

Lower prices are a primary reason to seek out global factory partners, but it shouldn’t be the only reason. Selling cheap products with questionable quality is a sure way to shorten your time in business. You should do some research on factory plants. You can look for online reviews, participate in business forums, and ask for references. You might also ask for product samples before striking a deal.

3. Practice Good Communications

One of the common terms used is RFQ, which is short for “request for quotation.” An RFQ is the process of inviting suppliers to bid on an order. You’ll want to be very clear about the type of products for which you are seeking bids. For instance, you’ll want to specify if you’re looking for a custom component to be used in a finished product as opposed to the complete product itself.

4. Understand Standard Processes and Materials

Your order may include standard processes and materials such as plastics, metal forming, wire harnesses, metal casting, and wire formed products. Materials such as stainless steel should be specified by type with their corresponding grade number such as austenitic stainless steels:304, 316, and 317, or ferritic stainless steels: 430 and 434. 

5. Order in Commercial Level Quantities

Another common term is MOQ, which means “minimum order quantity.” Most factories have an MOQ that you will need to meet. If you want to source from an overseas factory, the MOQ will most likely be higher than domestic factories.

6. Ask about Total Landed Costs

When you’re quoted a price, you should ask about potential additional costs often referred to as “total landed costs,” which can include charges for transportation, insurance, taxes, customs and duties, and financial institution fees. If you forget to ask about these expenses, you could be in for an unpleasant surprise.

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Elksourcing：Why a Factory Audit is Needed in China?

Apr 15, 2021 , by 露露

A Factory Audit is a comprehensive yet cost-effective way to make sure your vendor is reliable and offers quality products whether you’re just beginning to work with a factory or want to assess an existing supplier. A common factory audit includes many additional benchmarks, giving you robust insights to the way the factory is managed. Before you place any order, learn why a factoryaudit can save you from making a huge mistake by choosing the wrong factory.

1. Verify Supplier Legitimacy

Working with suppliers in China comes with risk, but a factory audit from a reputable quality control firm minimizes uncertainties. It’s difficult to verify a supplier’s claims from a distance, in particular without having industry knowledge. A factory audit can ensure that the factory is legal and has all the necessary certification and licenses to be able to sell and export goods.

2. Confirm Supplier’s Product Expertise

A factory audit gives you an inside look at the factory’s showroom without having to step foot inside. A quality control auditor verifies the machines to find out whether or not the factory has the capacity to produce your product internally. If some parts are missing, sub-contractors may be involved. Even if you’re OK with that, you still have the right to know how and where your products are produced.

3. Check the Factory Capacities and Organization

An in-depth supplier evaluation confirms that a factory can indeed meet the production lead-times you initially received from the vendor. The auditor checks the supplier’s storage capacity, which can greatly impact the quality of your goods. For example, products stored outside could be affected by bad weather. If semi-finished and finished products are stored in the same area, they may accidentally be loaded together. A factory audit also tells you how management is organized so you know who makes decisions and solves problems — and most importantly, who you should talk to for negotiations.

4. Authenticate the Quality Management System

The quality management portion of the factory audit confirms that the factory has the necessary processes in place to ensure the quality of your final product. The auditor checks how your specifications are reviewed and considered, the way goods are controlled during production, and how the machineries are calibrated over time to guarantee the same efficiency and quality result. There are key quality indicators for all relevant functions at every organizational level to make sure no detail goes unnoticed.

5. Verify the Supplier’s Social Accountability

Your factory audit provides a thorough review of the factory to make sure that at an administrative level, all documents conform to the local regulations. As per the SA 8000 standards, the auditor reviews HR records and even interviews managers and workers to confirm the factory’s work environment. You’ll receive verified proof that the working environment is clean, and the conditions are acceptable.