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.

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?

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!

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.

A Delicious Opportunity: How Global Sourcing Benefits Food Companies

They say that it’s the flavour that people remember.

If you work in the food industry, then you know this to be true. And, if you’re reading this article right now, it’s likely you also know that significant savings are on the table from globally sourcing food products.

But at what cost to the flavour might a 40%-70% saving come? After all, if you buy something from the other side of the world and just one ingredient isn’t quite right, people might remember your flavour for the wrong reasons.

But, not to fear. Although the food industry faces several unique challenges in global sourcing, the savings on offer can be realised.

Provided of course, you have a heads-up before make any changes to your supply chain.

Logistics considerations

The majority of global sourcing is done with seafreight which takes around four weeks. But, if something needs delivered quickly, then airfreight is an option and cuts delivery times down to just a few days. However, there are a couple of problems to be aware of with airfreight:

●     Cargo pressurisation
One problem is, depending on how delicate the food products you’re sourcing might be, pressurised cargo holds of air transportation can potentially affect the chemical composition (and ultimately flavour) of some products. It’s best to check up on this before you book any deliveries.

●     On-airport chilled facilities
Another issue is, not all airports have on-site chilling facilities for imported food products. So, if you’re having chilled goods imported from other countries, you’ll need refrigeration trucks on standby to take the goods into an appropriately cool environment.

When shopping for overseas logistics quotes, make sure you’re clear with the supplier about the nature of the transportation so you get quoted for chilled environments as necessary.

The subjectivity of taste testing

Outsourcing any kind of manufacturing and purchasing to countries such as Asia, India or South America often raises concerns over quality. And, the third-party auditor is the best tool the global sourcing supply chain manager possesses to ensure quality standards are met.

However, with food industry, things are different. For example, if a blueprint, materials list and design brief are sent to a hardware engineer anywhere in the world, it’s easy to recreate a piece of technology with exacting precision.

Taste testing brings a large degree of subjectivity.

Your idea of what constitutes “spicy” might be something completely different to a purchasing manager or manufacturer in a different part of the world. Especially if they’re from completely different cultures.

One way around this might be to visit the country yourself. Cultural differences in both business and social etiquette must be learned. But at least you’ve experienced the product firsthand before ordering.

Special auditing considerations

The fact that food is in the “perishable goods” category means a few more special considerations. Problems you can face in the food sector include out of date protocols, counterfeit documentation and immature risk assessment.

While tools and machinery products face their own challenges with hardware, a specialist third-party food auditor is especially important here. Products must be properly tested for genetically modified (GM) ingredients and other illegal additives depending on the regulations of your country.

In many less-developed countries, counterfeit legal documentation is common, and a strong internal quality system is required which includes 3rd party inspection.

It’s tough, but not impossible.

In one recent client success story with a flavour and fragrance manufacturer, Mawson Global managed to shave $248,000 off the annual spend while maintaining high enough quality for them to become one of the leading flavour houses in Asian.

To find out more, contact one of our global sourcing specialists today and get a QuickLook Analysis to see how much you could save while working with a company who cares as much about your flavour as you do.

What to Expect During Supplier Visits and How Mawson Global Can Help

When you’re contemplating visiting your suppliers, it’s helpful to remember some advice from “Sesame Street:” “Asking questions is a good way of finding things out.”

At Mawson Global, we have the expertise and the skills to make supplier visits successful -- and educational. Whether you need a guide on-site or someone to visit potential suppliers on your behalf, we can help.

If the supplier is new to your organization, one of your primary goals should be to validate claims that they make in sales presentations and proposals. If the supplier is one that you already use, it’s helpful to conduct an annual renewal evaluation or a periodic cost negotiation.

Here are some tips on how Mawson Global can help you get the most out of a supplier visit:

• Visit the receiving dock. On the dock, we can help you find the names of suppliers and the quantities of raw materials on hand. We will help you compare the information that you have received from cost-analysis negotiations to what we can observe on-site.  Here is a great place to see if the product you are buying is really made in the factory or just shipped in from the real producer!
   
• Visit the shipping dock. Here we can see the condition of finished goods, observe the quality inspection process and learn how shipments are handled.  Making sure the quality inspectors (preferably third party) understand what you are looking for is one of the most important issues to solve on a supplier visit.
   
• Talk to the sales staff. We ask how orders are received, entered, and queued for production or fulfillment, and whether electronic notifications to the customer are available at every step.
   
• Talk to line employees. We’ll check on company morale and organization, and ask specific employees specific questions. For example, it’s helpful to ask machine operators about their productivity per hour so you can verify any commitments the sales team has made to order delivery dates.
   
• Talk to management. We’ll ask about such things as communication structures, employee turnover, and how long management has been in place. If relevant, we’ll help you peruse the company’s financial statements and business plan.  Here you are trying to get a feel for how committed the whole company (not just the sales department) are to your project.

Can Your Business Benefit from Global Sourcing?

Are you considering global sourcing for your business or your clients? Curious as to what the initial steps may be?

At Mawson Global, our mission is to make international growth and scaling simple and accessible for all companies, regardless of their size or budget. How do we do this? Simple. We introduce you to suppliers and partners across the globe in order to help you increase profits, improve efficiency, and strengthen your entire organization. Regardless of your market or the products you need, we aim to find a reliable, affordable overseas supplier and partner for you.

Saving at least $100,000 on a project is common for Mawson Global clients. In fact, most of our clients see that type of savings on their first project. Moreover, their savings typically range between 40 and 70% of domestic prices. At last count, Mawson Global clients have saved in excess of $20 million utilizing our global sourcing services.

While our clients come from myriad industries and companies, all with varying sizes and revenues, they share some core common characteristics:

• They are purchasing products not made in the domestic market.
• They spend more than $50,000 with any one supplier.
• They have plans to buy plant and equipment worth more than $50,000.
• They are a company’s owner, CEO, COO, or CFO.

Here at Mawson Global, we are confident that we can assess your potential cost savings while keeping your supply chain intact. We are not broker-agents. We do not take commission. Rather, our services are fee-based so you can rest assured that we’ll be working with your business and client interests in mind. Our research and advice is also completely independent and unbiased.

With professional teams based in several strategic countries, Mawson Global help businesses worldwide safely minimise any risks inherent in global purchasing.

Want to know if Mawson Global sourcing is a good fit for your company? Take our 10-product challenge. All you need to do is tell us five to 10 products that you’re currently purchasing from an importer. From there, we’ll work to find those items from a less expensive international supplier.

Now is the time to find out if global sourcing can help you grow your business. Contact Mawson Global today!

How to Overcome Language Barriers when Sourcing from China?

By now, it is no secret that globally sourcing your company's products can improve your productivity, efficiency and bottom line. From time to time, however, language barriers can get in the way and interfere with an otherwise fluid process. Ranging between simple miscommunications to cultural faux pas, language barriers and “lost in translation” moments can cause international business relationships to come to an abrupt stop.

Anticipating and planning ahead for these potential language issues before they arise is crucial for continued success and uninterrupted business. Therefore, putting together a strategy that will support you in the event of language barriers will help you weather these tough situations. Follow these strategies and find a balance that makes sense for you to help overcome language barriers with your global sourcing partners:

1.       Translate all critical documents into the local language. In anticipation of entering into an international business partnership, take stock of the basic documents that will establish and nurture the new partnership. Documents to consider include (though aren’t necessarily limited to) legal contracts, sourcing guidelines, company and background information, and operating agreements. Find an expert to help you translate these documents into the local language. Doing so sets a balanced tone from the start and ensures that both parties are aligned from the get-go. Translated documents allow for transparency, giving all involved a clear frame of reference moving ahead. If at any point, disagreement or confusion arises, these translated documents serve as “reset” baselines.

2.       Utilize multiple channels for communication. Best practices recommend that one of the most effective strategies for overcoming language barriers is creating redundant systems. In other words, if you’re frequently hosting conference or Skype calls with your international partners, follow those calls up with summary emails that outline the major takeaways from each call. These emails then serve as a reliable paper trail, enabling both sides to document key items of discussion and business. Furthermore, by spreading the means by which you communicate across various medium, both you and your partner gain valuable insight into who the other “is,” giving your relationship a more solid footing than may otherwise be attained if limited to one static means by which to communicate. Even simply hearing a colleague’s voice helps to build strong relationships. 

3.       Partner with sourcing firms that have language capabilities: Selecting a global sourcing partner that has language and translation capabilities is a must and will set you on the path for clear communication from Day 1. Your sourcing partner should be able to navigate your sourcing market with conversational and cultural fluency, as well as have the ability to translate written documents as part of the process. Premier firms provide this support to clients as part of their ongoing relationship and can provide superior support at a reasonable price when special translation needs arise.

If you’re contemplating launching a global sourcing initiative, Mawson Global can help. Contact us to discuss your business, your sourcing goals and how our services can make it easier to navigate the process today.

The Chinese Economy and the Effect on Australian Trade

As the first two months of the new year wrap up, there is some sobering data and speculation about the current state of the Chinese economy in the news.

2016 started with a bang (or bust, really) with trading in Chinese stocks being halted twice within the first week by Chinese regulators after the Shanghai 300 Index dropped more than 7%. This volatility quickly rippled across international markets from the US to Germany to Australia. While this erratic behaviour could spell trouble for the Chinese economy, American economist Paul Krugman believes that if the Chinese market were to crash, it wouldn’t resonate nearly as strongly as a US crash would. This assertion is based on the relative insularity of the Chinese market, though a crash would no doubt strike the Australian economy more than most, given the strong ties to Chinese industry.

That sentiment, though, may not be as reassuring to Australian businesses, especially those who rely on trade and manufacturing from China. China reported overall GDP growth of 6.9% for the 2015 year. While this is down significantly from a peak of nearly 15% in 2007, it has remained relatively steady since the end of the 2013 year.

The constancy of this GDP growth, however, has some economists outside of China wondering if those numbers are rooted in reality. In fact, according to Business Insider Australia, many market watchers “suggest that the figures are merely a by-product of the government starting with the headline figure first and then working backwards, rather than the other way around.” Were such an assertion to prove true, the impacts on manufacturing and future growth would be staggering, depending how drastically those GDP figures were off.

While it still may be too early to make any assumptions for the remainder of the 2016 year, this year will certainly prove to be one of hand-wringing for market analysts at home and abroad. No matter what happens with the Chinese economy, the world will be watching and responding accordingly.

During this time, our team at Mawson Global will be working closely with our team in Asia to ensure our clients’ needs continue to be met without any delay in service. If you would like to learn more about how Mawson Global can help your business save money, please contact us or take the Savings Challenge today!