E-Sourcing Forum » Boston Consulting Group on China Sourcing

Boston Consulting Group on China Sourcing

October 23rd, 2007 at 07:56am David Bush - Iasta

Boston Consulting Group, a highly respected consultancy, has released a new publication named Sourcing From China – Lessons from the Learners. It is another one of these reports that I have come across recently which is a digestible size and easily read. I recommend downloading and saving, if your organization does any offshoring or plans to. Understanding the risks versus the rewards is the first thing that should be done before proceeding. It can be wildly successful, or implode spectacularly. Or, more likely, it will be somewhere in between, and require more than you ever anticipated.

Of interest to me, was an exhibit which describes the four stages of successful China Sourcing. These follow as Stage 1: Test the waters; Stage 2: Early Engagement; Stage 3: Full Integration; Stage 4: Make China a Center. A larger version of the image is available below.

BCG also identified ten recommended best practices (nice, convenient round number) which they go into great detail on each. At the high level three listed that I found helpful and interesting were:

Define a clear sourcing strategy with specific targets and plans
Align the China Sourcing Organization with Global Procurement
Gain 100% transparency into Sourcing volumes and savings

Its a good report and worth saving for reference.

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Entry Filed under: Analysts/Research, Global Supply Issues/Risk, Suppliers

8 Comments Add your own

1. Ralph | October 24th, 2007 at 9:58 pm

Hi David , thanks a lot for your sharing of the BCG article.
The four stages mentioned of sourcing in China really makes great
sense,actually now our company(an European buying alliance started China sourcing 3 years before) is still on stage 2 ..
If possible,could you give some opinions about E-sourcing application on different satge of the 4 ?
Thanks and have a nice day!
2. David Bush - Iasta | October 25th, 2007 at 12:00 pm

Ralph, thanks for commenting. That is a good question that deserves a good answer, give me some time to draft a real response and look for it soon. Also, apologies for taking a day to publish your comment, it was lost in a flood of spam bot comments and we are currently working on a new captcha technology since our active one has been cracked!
3. Roger | March 31st, 2008 at 1:25 pm

Not bad… I think its a good resource for anyone looking to start sourcing from China. This is a complex place with lots of considerations to be made before-hand. Wonder what the 5th stage would be…?

Roger @
4. Iris Cheung | June 5th, 2008 at 11:25 pm

Having a platform summarizing all the tricks and problems that overseas trading platforms have come across that would be good. Also regular ranking trust worthy partners would be good. Doing biz at China requires much more experience which if there is a platform summarizing the handon experience would be good
5. mark | August 26th, 2008 at 1:28 am

This company addresses a lot of the issues identified in BCG’s paper.

http://www.monterosourcing.com/
MonteroSourcing uses a proprietary global sourcing platform to cut customers’ production costs by 20-50% without dealing with the hurdles of sourcing in China.
6. Ray | October 22nd, 2009 at 10:01 am

I am a sourcing consultant from Sourcing Spectrum. I also like this article and the following few strategies are the key take-aways:

* Define a clear sourcing strategy with specific targets and plans
* Align the China Sourcing Organization with Global Procurement
* Gain 100% transparency into Sourcing volumes and savings
7. Ray Jia | October 22nd, 2009 at 10:03 am

I am a sourcing consultant from Sourcing Spectrum. I also like this article and the following few strategies are the key take-aways:

* Define a clear sourcing strategy with specific targets and plans
* Align the China Sourcing Organization with Global Procurement
* Gain 100% transparency into Sourcing volumes and savings
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