A Vital Tool for Machinery & Industrial Supply Companies

The machine and industrial supply sector is often a competitive environment.

You know the great feeling of securing a valuable, long-term contract with an established company. But ensuring you have the kind of supply chain in place to offer competitive rates, with the proper quality assurance, and in the right timeframes is a genuine challenge.

Naturally then, global sourcing has become increasingly popular for industrial supplies and machinery.

With savings of 40% to 70% on the table, medium, large, and even some small businesses adopt this strategy to shave costs. It means offering more competitive quotes to secure those all-important contracts.

Naturally, such savings require a little diligence to be fully recognised. Let’s take a look at some key considerations for sourcing globally in the industrial supply and machinery sectors.

Schedule considerations

First and foremost, and as we often highlight here on the Mawson Global blog, sourcing products globally takes a little longer than purchasing from a supplier that’s just down the road.

Sea freight is the most common method and takes around four weeks for delivery. Airfreight is an option and spending the extra cash can shave that time down to just few days.

With the machinery and industrial supply sector specifically, it’s important to recognise that many of the largest contracts are often seasonal in nature.

Sourcing from many foreign countries such as China or India means working with cultures that don’t recognise Judeo Christian holidays such as Christmas.

Whichever country you decide to source from, ensure you stay up to date with the holiday calendars to avoid delays during important seasonal contracts. Check out our guide to Chinese holidays here. 

Quality considerations

At the forefront of most people’s minds when sourcing globally for the first time are considerations of quality. Another point that’s particularly relevant in the industrial supply and machine industries is the idea of safety regulations.

Safety regulations are different in different countries. So one piece of equipment ordered from China may not be built to the same safety specification as one you ordered in Australia where local standards are observed.

Consequently, it’s important to be crystal clear about what you want from your overseas supplier, taking into account not only the difference in safety legislation, but also the language barrier. Be super concise with your language.

A good rule of thumb is to never assume anything and to always spell everything out.

Cultural barriers

Finally comes the inevitable cultural barriers. Business is increasingly global these days and learning how to effectively interact with different cultures is an invaluable skill for the discerning supply chain manager.

But there are practical differences in the way business is conducted, too. For example, in Asia and many other countries from which you might source globally, labour is typically very cheap. Consequently, production lines are often built to accommodate more manpower and less automation.

This must be taken into consideration when ordering machinery. Conversely, if setting up your own operation overseas, you may find it cheaper to employ more locals. Expectations will differ on both sides of the proverbial fence, so again, don’t assume anything.

Next comes the normal issue of etiquette. It’s often surprising how different cultures can be and how easy it is to find yourself leading an awkward silence by failing to recognise a social faux pas.

If you want to save yourself that kind of embarrassment and work with people who can help you build the kind of strong and profitable relationships you want overseas, call one of the Mawson Global team today for a QuickLook Analysis.

How to Choose a 3rd Party Quality Auditor

In global commerce, an independent, unbiased third-party quality audit is one of the most effective ways to minimise the risks of every transaction.

What is a Third-Party Audit?

A Third-Party Audit introduces an autonomous team of auditors that have zero connection to your supplier to perform the audit; whereas first- and second-party quality audits may have a more direct connection to your supplier. Products are assessed by the auditors using a baseline set of pre-established standards of quality (ie ISO 9000 or anything else you specify). Upon completion of the audit, the third party then issues a certification of compliance.

Auditors may use any of four types of third-party quality audits for evaluations, and each one examines a different facet of the product.

Product Audit - A Product Audit occurs when a detailed inspection of the final product is conducted prior to the product being delivered to the customer. As such, Product Audits are more in-line with a quality inspection than a true “audit.” Accurately conducting Product Audits ensures that the product you pay for is what is delivered!

System Audit - The quality System Audit is somewhat self-explanatory. A System Audit analyses the various components of the entire production system, including how it’s used, who uses it, when it’s used, where it’s used, and why it’s used. Auditors take a comprehensive look at how everything works in concert with every other component to produce the final product.

Process Audit - While a System Audit is typically broad in its scope, the Process Audit usually dives deeper into the product. A Process Audit looks critically at, and evaluates, the intricacies and quirks of a particular system. A Process Audit verifies aspects of the production process, such as the machinery, people, and materials involved.

Compliance Audit - When conducting a Compliance Audit, work instructions, contracts, obligations, and procedures associated with the product are scrutinized by the auditors, and are then compared to what’s actually happening during the production process.

Selecting the Right Auditor

Third-party audits are extremely useful and reliable in order to foster growth and improvement within your supply chain. Selecting the right auditor or audit team isn’t a “one-size-fits-all” solution, nor as easy as simply hiring a big brand or asking your supplier to recommend one. Follow the recommendations below to find the right auditor solution for you and your business.

First (and most importantly), decide whether or not you want a global auditing partner with international experience or one that’s local. If you’re searching for an auditor in your region, find a provider that specializes in your area of business. A computer chip auditor won’t be very helpfulif you’re in the business of buying and selling drill bits. Don’t forget to do your due diligence when vetting an auditor: be sure to review their previous work and ask for references to ensure their expertise and credibility. Finally, regardless of the type of auditor or firm you ultimately hire, ensure that they provide guidance on creating an inspection process your organisation can use after the audit is complete.

Getting an Audit Edge

If your company needs assistance in locating a qualified auditor or firm, Mawson Global has local knowledge on inspection agents who can meet your organisation’s unique needs. We are experts in global commerce with more than 70 years of experience in the field. We understand the importance of providing the highest quality products possible, and we are committed to helping you achieve that goal.

Crucial Tips for Doing Better Business in Asia

It may go without saying that first impressions are important in business, but they are particularly crucial when you’re doing business in Asia.

Your image matters. Looking polished and sharp in a business meeting not only reflects well on you and your business; it also indicates respect for your host.

Proper Attire
For example, wearing an open-neck shirt, and going without a tie, is usually appropriate when you’re visiting suppliers, particularly if you’re touring factories. However, for other business meetings the dress code is stricter. Men may need a suit and tie, and women should wear a skirt or dress that falls below their knees, along with a jacket or sweater that covers their arms. All dress should be weather appropriate; wearing a heavy suit in a humid city can be uncomfortable and can interfere with the impression you want to create. You also need to make sure your socks are in good condition as shoes are prohibited in certain places in Asia, including some restaurants.

Business Card Etiquette
Business cards are another crucial consideration. Make sure you have plenty, because you’ll be giving away a lot of them, especially when you meet potential clients for the first time.

Following these tips can help you avoid cultural business-card gaffes:

• Use both hands when presenting and receiving a card. Using one hand in Asia is considered casual to the point of rudeness.  Although it is common to slide you cards over a table like dealing at a casino in the West this is not done when making a good impression in Asia.
• Properly acknowledge your associate. You do this by accepting his or her card and examining it carefully.  If you are not sure how long this should take be guided by how long they look at your card.
• Ask, “how should I address you?” Asian businesspeople are keenly aware of position and hierarchy. Titles are important, so don’t guess; ask! Do not be afraid to write down their preferred title so you can refer to it during the meeting.  When you make the effort to be respectful it is noticed and the other “mistakes” you will make are excused.  Also, never use a client’s given name unless he or she invites you to do so.
• Keep the client’s business card on the table during your meeting. It is also acceptable to place it in a cardholder. Either way, leaving the business card in full view for the duration of your meeting will show appropriate respect.

Mawson Global can help you navigate the process of doing business in China and other Asian countries – and making a good impression while you’re there! In addition to arranging hotel and flight bookings, Mawson Global’s on-site staff can advise you on the proper way of dealing with Chinese businesspeople, along with briefing you on local businesses practices, business development, and the country’s customs, holidays, and practices.

Three Steps to Avoid Recalled Products

The Scenario:

You imported a product from Asia and it has now been distributed all over Australia and Europe. You recently discovered that itdoes not meet labelling laws and must be recalled – at your expense!

This story isn’t new or unique. You can probably recite it by heart: a product gets recalled. There isn’t even anything necessarily wrong or faulty with it, yet another business underestimated or ignored the need to follow all rules and regulations for labelling and packaging.

We must, then, ask ourselves: How can we ensure our new product is not recalled due to us or someone on our team overlooking a labelling requirement for another country.

At Mawson Global, we recommend following these three steps to ensure your business does not have to endure an expensive, not to mention embarrassing, product recall.

1.       Find reliable, trustworthy consultants in the countries where you conduct business to draft the labels and walk you through all the necessary import requirements.

2.       Hire unbiased third party inspection agents to check item labels before they ship.

3.       Cross your Ts and dot your I’s by using a customs broker to determine the paperwork necessary to successfully import your product.

When it comes to successfully importing products in another country and avoiding costly recalls, there is no such thing as being over-prepared. Double-checking all label requirements is the first step to saving time and money in the long run. You do not need to be the expert on each rule and regulation your business will face, but it is important to hire someone who is an expert.

What other precautions can you share to make sure a labelling mistake does not lead to an expensive recall?

A Relationship to Build On: The Benefits of Global Sourcing for Construction Companies

Issuing a tender can be a pretty tense process. Often, that’s stating it mildly...

You and your team sit down, painstakingly put together cost projections for materials, man-hours and the construction technicalities at hand. You arrive at the best price possible and you submit it to the client.

But, what happens meanwhile? Your competitors are doing the same. How much is their bid? Have they struck a great deal with a global supplier to source products significantly cheaper than you? Only time will tell. And usually a lot of nail biting, too.

In many ways, the construction industry is unique when it comes to budget considerations.

Sure, budget is paramount for any business. But, when you’re issuing a tender, getting your budget the right means the difference between having work to do and having nothing to work on at all.

Naturally then, the continuing trend in global sourcing is of particular interest to construction companies. Here’s how to get it right.

Stay on top of your schedule

When it comes to the different stages of a project, each can potentially be held up waiting for inexpensive and often very basic components that get stuck somewhere in the supply chain.

If you’re sourcing from somewhere in Asia, for example, it’s important to be especially diligent about the supply chain schedule. A 55% saving off the domestic price is an attractive reason to source any given widget globally.

But if they get held up and slow down the next stage of funding, your savings are nullified and major cash flow issues arise.

Seafreight is the most common form of shipping used in global sourcing and takes on average around 4 weeks. Airfreight can reduce that down to a few days, but is more expensive.

It’s worth making contact with an airfreight company to have a standby logistics account registered. Likewise, having backup component suppliers for emergencies is especially important when taking your supply chain global.

With these contingencies in place, you can reap the massive savings and ensure you’ve got your bases covered.

Quality assurance measures

Quality is a major concern for any business looking to outsource globally for the first time, and construction especially so. The idea of poor quality components jeopardising the safety of a project is beyond unacceptable.

Different regions and markets have different ideas of what constitutes “satisfactory quality” or “fit for purpose”. For that reason, paying a reasonable fee to an impartial third party inspector with a predetermined set of factors for what you consider acceptable quality is the ideal way to keep your project on track.

If everything’s checked by a reputable auditor, you get the peace of mind you need to focus on the project.

Be aware of cultural barriers

Finally, comes the inevitable cultural barriers.

It’s often quite incredible how different perspectives can be overseas. For that reason, being crystal clear and unambiguous in the language you use with your orders is tantamount for a successful project.

Classic examples which anyone who has travelled internationally will appreciate include:

• “Neutral” colour schemes are not the same in all countries
• "Normal" toilets and bathroom fittings are very different
• “Environmentally aware” buildings and building materials mean very different things in different countries

In addition to committing to a policy of crystal clear communications, it’s worth doing a little research, too. Head to Google and search for info dealing with different cultures in a business context such as this article on the Chinese holidays.

If you’d rather speak to someone in person, call one of our specialist outsourcers with a strong track record of saving money, and even stronger relationships built while sourcing globally for construction companies.

What a Sourcing Project Delivers

Research Projects Offer Mawson Global Customers Peace of Mind

Global sourcing can provide significant cost and time saving benefits to companies, while increasing their profits and strengthening their overall business. Yet the risks and time commitment required to successfully utilise global sourcing can be overwhelming.

If your company is considering global sourcing for one or several products, you need all the facts up front – before you make a decision. Mawson Global’s research project (RP) offers the vital information your company needs to make an informed decision about global sourcing. 

A research project provides a detailed analysis of global sourcing for a particular product. Projects are based on specifications, such as volumes and prices, you provide in a sourcing request document. Mawson Global then takes these specs and conducts comprehensive research on sourcing for that product, including:

Sourcing  recommendations – One of the most useful components of the research project is a list of reliable potential suppliers and their locations. Mawson Global starts with 30 to 40 supplies and uses your criteria to narrow down the list to the best possible matches. This detailed and proven process is what distinguishes us from other sourcing providers, and it’s what makes us your best ally for global sourcing your products.

Estimates and ratings – The research project offers a break down of numerous estimates, by supplier, for global sourcing a product, including approximate landed cost, current cost, potential wholesale price, retail price, potential profit and savings, margin, approximate annual volume, potential annual profit, potential profit in three years, and annual import spend. It also features ratings on each supplier’s efficiency, reliability, and quality system.

Product samples – We ship several samples directly to your office for review. This saves you time and confusion in trying to request multiple samples from various suppliers and discern one sample from another. 

Next steps  –  Mawson Global provides a detailed prospectus of the follow-up steps your company needs to take in order to maximize the information in the research project, including supplier visit and sourcing project information, and move forward with your global sourcing initiatives.

A research project is a valuable tool in determining whether global sourcing is right for a particular product, and ensuring your company maximizes the benefits of partnering with an international supplier. Mawson Global doesn’t just provide research into globally sourcing a product; we provide a full spectrum of services to assist you with the entire process – from start to finish. Get your free, no-obligation QuickLook Analysis by filling out our QuickLook enquiry form.

Business Card Etiquette in Asia

The old adage that you only get one chance to make a good first impression definitely applies when it comes to exchanging business cards in Asia.

Westerners treat business cards with a casual tone, and often consider them a nice leave-behind item. However, your business partners in Asia consider a business card in a much more serious context. It is an integral part of your introduction, and the card has an important place during your meeting.

There are three key components to successfully presenting a business card in Asia. The first involves the information on the card. It’s good practice to present a two-sided card, with one side printed in your native language and the other the language of your host. The information on the card should explain who you are, including your name, contact information, company, and position.

The presentation of business cards is a ritual in Asian and should be treated with respect. Your card should always be presented while standing, with both hands. The card should also be placed directly into the hands of your host, as well as each member of his or her team, in order of hierarchy. Present your card with the translated side facing your Asian associate in order to show respect and sincerity in establishing this relationship.

When you receive your associate’s business card, study it momentarily, and clarify how your host wants you to address him or her.

Finally, it is customary to keep your associate’s card on the table in front of you during the meeting. Never stack the cards, write on them, or treat them in a cavalier manner, such as stuffing them in a pocket or throwing them into a briefcase. All these actions are considered bad manners. You should also avoid presenting a damaged business card, as you host could interpret it as a sign of disrespect.

If you’re planning a trip to Asia to meet with potential global sourcing partners, Mawson Global can help. Our team is familiar with business card customs, as well as others important to building strong business relationships in Asia. Let us help you make your trip and partnership a success -- contact us today!

7 Tips to Keep in Mind with Global Sourcing from Asia

If you’re reading this article right now, it’s likely you’re aware that sourcing globally can offer enormous financial benefits to your supply chain.

But, as you’d expect, typical savings of between 40% and 70% don’t come with a snap of the fingers...

A few new processes must be considered, and a few new skills must be learned to ensure you stay on track and realise the full benefit of global sourcing.

Here are some top tips to keep you on track.

1. Quality and Quality fade

Studies show that at the front and centre of people’s concerns when looking into global sourcing surround the issue of quality.

And rightly so. The concept of “quality fade” is the deliberate and slow degradation of quality that happens when manufacturers replace materials with cheaper alternatives to reduce cost and increase profits. Fortunately, there’s a simple weapon for the discerning supply chain manager to tackle quality-orientated issues when sourcing globally. And that is the third party inspection.

An investment in a qualified, reputable third party auditor ensures that you get what you pay for and can pay serious dividends in the long term.

2. Costs and time associated with travel to suppliers

When calculating the savings from a global sourcing initiative, it’s easy to look at the cash difference between your old supplier and your new supplier and ignore the rest. However, it’s important to realistically assess how much money you’re saving by including expenses such as time and travel costs to suppliers.

It might make your balance sheet look more attractive without considering these, but fail to do so at your peril.

3. Language barriers

It’s often worth spending just a little time learning one or two basic phrases of your new supplier’s language. When building a relationship with a foreign business, taking just a little initiative to learn common greetings in their mother tongue can have an enormously powerful effect on rapport.

Also, it’s important for you to be ultra concise with your order, ensuring that every aspect of it is spelt out, leaving no room for ambiguity or misinterpretation.

4. Cultural differences

Embarrassing and relationship-damaging faux pas must be avoided at all costs in order to properly maximise the benefits of sourcing equipment or manufacturing globally. Take the time to learn the cultural differences in the nationality of your individual suppliers in addition to one or two nifty local phrases.

5. Tariffs and taxes on imported goods

Tariff in this context refers to international trade tariffs, or the taxes placed on imported goods. To avoid nasty surprises that eat into your savings later on, ensure you work with qualified customs brokers who will not only give you the heads-up about what (if any) costs you’ll incur, but also about any necessary licenses or permits you might need.

6. Transportation costs and geographic distances

When it comes to the logistics, know your numbers. It’s worth having a handle on geographical distances in addition to how much the different transportation costs are. Typically, it’s cheaper and slower to use sea freight, although air freight is an option if you need something faster and are willing to pay extra for a speedy delivery.

7. Do your sums before you commit to the shipment!

Ultimately, it boils down to properly doing your sums.

Don’t commit to anything until you’ve properly and realistically calculated any and all expenses associated with the additional distance for goods to travel through the supply chain now that you’ve taken it global.
Yes, there are big savings on the table. But it’s much better to be honest about how big those savings are. If you want to be sure, contact one of our specialists today and get a QuickLook Analysis.

Metal Product Manufacturing and Mawson Global - The Perfect Alloy

Fabricated metal product manufacturing is a major global industry. The industry generates approximately $2 trillion in annual revenue and whether you’re a major consumer products manufacturer or a smaller regional player meeting niche demand, fabricated metal product manufacturing is an industry that depends on efficient operations to hit profitability targets. Global sourcing metals can offer significant benefits to manufacturers working to lower costs and raise profits in this highly competitive industry.

Reducing raw materials expenses: Companies producing products from metal materials operate in a highly competitive environment. An experienced sourcing partner, like Mawson Global, with relationships in China and other metals-producing countries can help you identify the best partners, negotiate hard for excellent prices and let your team focus on its core competencies.

Building strong sourcing partnerships on the ground: Doing business in China requires strong sourcing relationships on the ground. Trusted relationships, combined with a deep understanding of local business culture and traditions, makes it easier for a company to close important deals. An established sourcing partner with these relationships in place can effectively represent your company and save significant costs related to opening an office, making local hires, and paying for frequent executive travel to the region. Relationships also make it easier to resolve problems when they arise, trouble shoot disputes, and manage process improvements that can shorten customs delays and other logistical challenges.

Streamlining the value chain: Metals manufacturers rely on tight value chain management to keep production moving and costs down. Value chain management is a complex and expensive undertaking in its own right. By choosing an expert sourcing partner with strong knowledge of sourcing raw ore and established regional relationships, it’s possible to run a lean value chain management team. It also helps direct their focus to activities higher on the value chain that can further optimize a company’s profits. Streamlining the value chain is important for large companies with well-mapped processes, as well as smaller companies relying on simpler systems.

If you’re a metals manufacturer that’s ready to improve your sourcing operations in Asia, contact Mawson Global. Ourproven two-step process can identify ways to streamline your operations and improve your profitability.

Mawson Global FAQ: How Will Global Sourcing Affect Your Business?

The idea of having your equipment purchased and shipped from the other side of the planet raises a lot of questions for a business owner.

There are concerns over quality control, cash flow, supply chain complications and international legislation. Naturally, we’re asked these questions a lot here at Mawson Global.

Here’s a quick overview of the most commonly asked questions about global sourcing and what it means for your business.

1.   Is it worth me investing in global sourcing?

Naturally, the size of your company and your level of turnover are key considerations when determining whether or not it’s worth you investing in global sourcing in the first place.

As a general rule of thumb, the savings on offer by dealing globally and direct with suppliers is between 40% and 70%. Provided the savings available to your particular orders outweigh the one-off fee paid to Mawson Global to source the products, it’s worth coming on board.

This is why we have our QuickLook Analysis. So we can uncover the potential savings, determine if it’s worthwhile for you, and without obligation to sign up for the long term. The process is typically completed inside 10 days.

2.   How will it affect my cash flow?

Typical purchases made when sourcing hardware globally involve a deposit down when you place your order, with the remaining balance to be covered upon shipping. Most banks offer trade finance products so you can facilitate the process without it impeding your business’ cash flow.

The benefits on offer considerably outweigh temporary inconveniences for cash flow and the fees associated with these bank services are typically very affordable.

3.   How can I guarantee satisfactory quality control?

When sourcing your equipment globally, it’s possible to predetermine a series of tests to be conducted by a third party inspector to ensure the equipment you’re purchasing is up to whatever standards you deem necessary or appropriate for your business.  Failing to use a trusted third party quality auditor is the most fundamental mistake most importers make.

That said, because you’re purchasing equipment directly from the factory, it comes off the production lines and goes immediately into quality control. Should problems arise, it’s much quicker to deal directly with the factory rather than a third party supplier or wholesaler.

Without this middleman, there are less stages where mishandling can happen and communication to fix problems is more streamlined.

4.   What about tariffs and timeframes?

If you’re in the West, sourcing equipment from countries such as China, Southeast Asia and India naturally takes a little longer than if you were sourcing from home. As a rule of thumb, and in addition to the production time for the equipment, you should allow four weeks for the delivery of globally sourced equipment to arrive via sea freight.

Air freight is an option and, although more expensive than sea freight, can shave the shipping time down to just a few days.

Mawson Global advises of any licences or permits necessary to ship your purchases. We also consult with registered and qualified customs brokers to ensure you know the importation tax tariffs upfront to avoid nasty surprises later down the line.

Have any other questions?

Do you have questions left unanswered? Contact one of our knowledgeable staff today to get a comprehensive answer to any other global sourcing question.