Understanding Asian Management Styles

The West looks to Asia for many things.

Whether it’s globally sourced products or manufacturing, forward-thinking economics, or an incredible history of culture, there’s a lot we can learn from many Asian countries.

And management styles is another item on that list.

With such a different historical background to most Western countries, the perspectives that found their way into the workplace are very different from those you’re probably used to.

And understanding these perspectives better can provide you inspiration on how to more effectively manage your own business.

But perhaps more importantly, it gives you insight into the workings of your Asian business partners, resulting in better interactions and stronger, more profitable relationships.

Let’s look at some key characteristics of Asian management styles and how they can help you understand this part of the world more accurately.

Political connections

The relationship between business and politics is stronger than ever, but in many Asian countries, that link is even more pronounced. In countries like America, deep political connections are a potential roadmap to success. Though capitalising on those connections is much less common in the West than in much of Asia.

In many Asian countries conducting business with politicians is standard practice. For example in China, dinners are regularly enjoyed with businesses owners and high-ranking local government officials to build credibility inside relevant social business circles.

Key takeaway: In many Asian countries, and as we’ll see more of soon, questioning authority is seen as a bad thing. This is especially true with the political establishment. It’s not like the West where an amusing quip about a recently-passed government policy will raise a smile, so the subject is typically best left avoided.

Asian paternalistic style

In the “Asian paternalistic” style of management, business decisions take into consideration the needs of all employees, often to a greater extent than the individual managers. In short, people are put first.

While orders are delivered in a top-down manner, questioning of senior decisions is rare due to an unspoken respect for superiors or management. Staff turnover is low and loyalty is ubiquitously encouraged as a cultural norm.

Key takeaway: Consequently, if you work in a sector of business that involves decisions that have a direct impact on a company’s employees at large, it’s important to frame your sales pitch and conversations in a way that observes the Asian paternalistic style of management. Failing to do so could make you look bad.

Confucian philosophy

There’s a lot of focus in the West these days about equality in the workplace. Back in 2013, we started to see the “bossless office trend” appear in everything from New York magazine to the Harvard Business Review.

The pin-up example is Semco, a conglomerate that’s distributed decision-making since the 1980s and has witnessed 20% annual growth rates for over three decades now. Sounds great, but ideas like that simply don’t fly in much of Asia.

Confusion philosophy is the polar opposite of the above ideology, whereby relationships must have a non-linear structure. A “bossless office” is considered a bizarre notion of the West and, in some cases, that’s putting it politely.

Some research suggests that many people in Asia go as far to say that a lack of acceptance for the inevitably hierarchical order of things is a root cause of many “Western problems” such as the degeneration of morals and the idea that the individual is more important than the collective.

In China, questioning authority can result in “losing face”. It’s a bad thing to have happen to you in a business context and, if you’re trying to source products globally, it’s your savings that are on the line.

Key takeaway: Making the extra effort to show respect for seniority is important. It’s a no-brainer that senior members of staff with whom you attempt to conduct business should be treated with a certain decorum. But you should know in advance that most Asian countries take this particularly seriously.

Want to speak to an expert with an established presence in Asia? Call Mawson Global today and speak to a specialist who knows how to walk the cultural tightropes.

Working with Mawson Global Leads to Cost Savings

Organization: Manufacturer of steel and innovative product development

Looking to Source: Bubble wrap

Results:

* Annual cost savings of more than $79,000.

* Rapid procurement of multiple sourcing options.

* A variety of pricing options from a diverse group of qualified suppliers.

The Objective

Our client, a small, independent roofing company, has only been in business since 2009, but it’s quickly expanding, both in size and in the products and services it offers. The client provides a traditional mix of domestic and commercial products, and is constantly developing new products. Always searching for ways to save on the bottom line, the company sought out Mawson Global to help it identify a reliable global sourcing partner that will help it save on the cost of shipping and packing materials.

The Approach

Because of Mawson Global’s expertise in globally sourcing materials, the client engaged us to identify reliable global sources for bubble wrap.

Because we have “boots on the ground” in China, we were quickly able to research a number of suppliers. Taking into consideration the client’s specifications for the product, we delivered a detailed list of suppliers from various provinces in China.

Our established rating system enables us to gauge the top suppliers by monitoring efficiency levels, reliability and quality. So within a short period of time, we were able to present the client with four different supplier options in our informative, easy-to-read Sourcing Report.

The Benefits

Significant Annual Cost Savings

Substantial Savings: As a result of Mawson Global’s global sourcing expertise, the client selected a vendor that will help it experience an annual cost savings of more than $79,000.

No Additional Costs: There are no hidden costs or fees because Mawson Global operates on a fee-for-service model. This also means that the client pays for the service once and continues to enjoy the benefits for years to come. 

Flexible Alternatives

Future options: Because of Mawson Global’s approach, the client not only has acquired a provider for its current needs, but has direct access to a number of suppliers for future projects as well.

Comprehensive approach: Mawson Global not only conducted its QuickLook Analysis, but engaged its Research Project capability as well.

Added Bonus: The client able to partner with a new supplier for the required product and can now quote on more product because of the cost savings.

Skilled, professional staff: Our Asia team members have been in the area for an average of six years, and during that time they’ve developed a streamlined process for selecting trustworthy, reliable suppliers that meet our high standards for quality and for customer service. This team, combined with our proven supplier ratings system, is why we were able to quickly address our client’s request for global sourcing options for bubble wrap.

5 tips for doing business in China

China is the largest supplier of goods to the United States, and the trade of goods and services between the two nations is a multi-billion dollar relationship. But in order to gain a foothold in the global sourcing industry, there are some cultural and business customs you will do well to adhere to if you want successful.

Mawson Global can act as a liaison between you and suppliers, and accompany you on overseas supplier visits and meetings. However, there are some important customs you need to be aware of before you go. Here’s a quick guide to get you through the trip embarrassment-free.

• Relationships before business. There is a saying in China that you don’t discuss business until the third cup of tea. The Chinese place great importance and value in developing relationships first and conducting business second. The best course of action is to learn about your host’s country, culture, interests, and share your own interests. Once trust and cooperation has been established, then get down to business.
• Always be on time. While the Chinese are occasionally late to meetings, your punctuality is a sign of respect. The pace of business in China is somewhat different; so don’t be put off if your hosts are late to a meeting. Just don’t cause the delay!
• Pay attention to your body language. Talking with your hands, pointing, waving, and gesturing are rude in China. Talking with your hands in your pockets is also disrespectful. Even a simple handshake should be handled in a modest manner. Too firm a grip, too much hand pumping, or too long of a handshake can be considered aggressive. Also, it’s customary to pass and offer things, such as dishes at a meal, with your right hand rather than your left.
• Keep a calm demeanour.  Avoid being overly boisterous or too forward with potential business partners. Instead, approach business negotiations with a calm demeanour, patience, and dignity, and you’ll win the day.
• Be prepared to dine and drink. Entertaining is a vital component to Chinese business culture. The Chinese like to conduct business over lunch or dinner, and they enjoy having drinks during and after the meal! Business deals often are completed over a meal. Make sure that you plan for this in your daily schedule.

With a team located in Qingdao, China, Mawson Global is uniquely positioned to assist you with your global sourcing ventures in China. Please contact us to learn more about how we can help you during visits, as well as with other global sourcing needs! 

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.

7 Tips to Keep in Mind When Global Sourcing Products

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.

Sourcing of Flavors and Fragrances from Asia

Global Sourcing Leads to Big Cost Savings for Mawson Global Client

Organization: Developer and manufacturer of flavors and fragrances

Looking to Source: Onion powder and other ingredients

Results:

* Annual cost savings of more than $248,000.

* Rapid procurement of multiple sourcing options.

* Variety of pricing options from a select group of qualified suppliers.

The Objective

During the past seven years, our client has developed into one of the leading flavor houses in Australia. With its own flavor development laboratory and factory located with its home office, the company is has an impressive portfolio of clients that seek its flavors and fragrances. Searching for a way to save on the cost of the ingredients for a variety of its products, the company reached out to Mawson Global in an effort to reduce its expenses on raw materials, as well as identify a reliable global sourcing partner. 

The Approach

Mawson Global’s reputation as a leader in globally sourcing materials led the client to engage us to identify reliable global sources for its onion powder and other ingredients.

The client has been expanding its business into Asian markets, so our China-based staff was able to strengthen these ties by identifying a variety of suppliers that meet the client’s product specifications and price point.

Using our proven rating system to identify the top suppliers, we were able to present the client with five different supplier options in China via our informative, easy-to-read Sourcing Report.

The Benefits

Significant Budget Benefits

Bottom line results: Because of Mawson Global’s global sourcing expertise, the client partnered with a vendor that will provide an annual cost savings of more than $248,000.

Perpetual bonus: Mawson Global operates on a fee-for-service model, which means there are no hidden costs or fees. It also means that the client pays for the service once, but will enjoy the benefits for years to come.

Flexible Alternatives

Multiple sourcing options: Mawson Global identified five reliable suppliers that matched the client’s requirements.

Growth potential: Because of Mawson Global’s efforts, the client now has the ability to quote more jobs and grow its business.

Future options: Because Mawson Global conducts a comprehensive search for sourcing partners, the client not only has acquired a provider for its current needs, it also has direct access to suppliers for future sourcing requirements.

An experienced team: One of the benefits of working with is that we maintain a staff in Asia. These team members have been with the company and average of six years, and during that time, they have sourced everything from colored glass to bubble wrap. They’ve also maintained a high rate of success thanks to a streamlined process for selecting trustworthy, reliable suppliers.

How to Mitigate Risk in Your Global Supply Chain

Around the middle of last year, a study sponsored by international logistics group, UPS Capital Corporation, was conducted at the University of Tennessee’s Global Supply Chain Institute.

The key takeaway of the study was simple;  risk mitigation in global supply chain management is dangerously lacking in the vast majority of businesses.

A frightening 90% of the 150 surveyed firms didn’t formally quantify supply chain risk when sourcing and manufacturing equipment globally. And not a single one consulted a third party specialist prior to taking on global sourcing additions to their supply chain.

Considering that many executives are aware of the highly undesirable outcomes of supply chain problems, it was a pretty shocking set of results. Dr Paul Dittmann who headed up the investigation stated simply that:

“Any business that does not have some basic form of risk mitigation plans in place is simply gambling with its existence.” Yes, it’s that serious.

So how can you mitigate risk in your global supply chain? Here’s a how-to guide on thinking both strategically and tactically so you’re in good shape to avoid the worst happening to your business.

1. Minimise exposure to risk

First up, it’s important to minimise the amount of risk to which you’re exposed in the first place.

A good place to start here is to sit down and look at each individual component in your supply chain and give it a risk rating of 1 to 10. Next, consider what strategies or alternatives could be used that would potentially pose a lower risk rating.

For example, if you’re gather components from a country that’s known to be earthquake prone, consider if there are other countries with similar deals on the table that are not susceptible to natural disasters.

It’s easy to become comfortable with the way your supply chain is set up. But when something goes wrong, you’ll wish you’d taken the time to minimise your exposure to risk.

2. Prepare for what-if scenarios

Another great exercise is to prepare for the “what if” scenarios.

Begin by listing all of the worst-case scenarios of things that could go wrong in your current supply chain setup. What would you do if one of those scenarios happened first thing Monday morning?

Set up at least two separate contingency plans, making the necessary phone calls and doing the necessary research for each one to ensure that it’s implementable should the worst happen.

Taking the time to prepare these scenarios upfront can save you a fortune and perhaps even your business should the manure hit the fan at the 11th hour. It’s often as simple as making sure you have more than one supplier for your most important items.

3. Re-examine global approach frequently

Sourcing globally can save huge amounts of money, often in the region of 40% to 70%. But it can bring further considerations for risk, and increased exposure to the macroeconomic climate is one of them.

Schedule a time in your calendar once every month, three months or six months (whichever you deem appropriate) to assess your supply chain. Check for legislation changes, new political parties coming into power or other potential or economic shifts that could affect your global approach.

By keeping on top of things, not only will you spot problems before they arise, but you’ll operate your business with peace of mind knowing that you’re on top of your supply chain.

4. Consider how one change affects all areas

If you followed the above steps, you’ll have a series of potential problematic scenarios that can affect your global supply chain. Take a bird’s eye view on these and consider how each event’s knock-on effect may hinder other parts of the chain.

Thinking in terms of the big picture is a cornerstone of good supply chain management. But, with global considerations, it’s especially important to cultivate this kind of top-down perspective.

5. Use rigorous quality standards for new suppliers

Finally, and perhaps not surprisingly, comes the idea of applying rigorous quality standards to new suppliers. Don’t make the mistake of jumping on board with someone too soon because they have attractively low prices. It’s an age-old mistake, even if it remains tempting.

A small investment in quality control conducted by an independent third-party inspector can save enormous amounts of money later on. Stay on top of your quality control.

Want to speak to a professional about supply chain risk mitigation? Contact one of our specialists today for a quick conversation with a qualified global sourcing specialist who takes financial savings just as seriously as quality control.

Importing: The Productivity Booster

Productivity.  It’s essential to success. It can be elusive. And it’s the driving force behind businesses -- literally. Without it, the world would crumble and nothing would ever get done. Without it your company wouldn’t exist.

Productivity is vital to all businesses, but it’s especially important to those in global commerce. To be successful, manufacturers need to bring products to market quickly, ensure on-time delivery, provide outstanding customer service, and maintain their market share. A high level of productivity is required to accomplish all these initiatives.  

There are a lot of methods for increasing manufacturing productivity – from restructuring the workforce to reworking procedures. However, one of the best ways to up the output is by importing manufacturing machinery.

Importing machinery can make a plant more efficient at a fraction of the cost of local machine brokers. It can also be accomplished a lot faster than other methods and with minimal disruption, especially when importing fully complete sub-assemblies.

By looking to equipment suppliers in other areas of the world, manufacturers can often find a larger selection of machines, lower prices, and better customer services. However, locating qualified international suppliers can be a challenge, especially for those with limited resources to devote to the search. These limitations don’t have to prevent you from importing your equipment, though.

Mawson Global, a leader in global sourcing, has a proven method for helping manufacturers import machinery and components. Need a supplier of sanding equipment or corrugated cardboard box maker? Mawson Global can perform a comprehensive search and provide you with supplier recommendations that meet a company’s exact requirements.

With Mawson Global, the risks commonly associated with global sourcing are minimal because we have teams located around the globe. This “boots on the ground” approach means we’re familiar with the international standards, language, and culture of each of the countries we source from.

If your manufacturing company is searching for a way to boost its productivity without having to decrease it first, Mawson Global can help. Let us handle the search for your machinery supplier. With our assistance, your business can not only improve its output, but also slash costs and increase its profit.

Co-Founder of Mawson Global Gives Over $400,000 in Business Referrals

 John Evans of Mawson Global Receives Title of BNI Networker of the Year 2014

Adelaide, Australia: John Evans, co-founder of Mawson Global, was recently named BNI Networker of the Year 2014. This exciting announcement from Business Network International makes John an integral part of business relations and is a prestigious title showing his work to genuinely make a difference in the businesses with which he meets. 

Given the nature of global sourcing, providing that kind of value is certainly possible. Because most global deals are with CEOs and CFOs, networking ensures we keep in contact with the decision-makers and allowed John to help them in more ways than purely through Mawson Global services.

Don’t underestimate the power of networking. Because when there’s real value to offer, a little time spent networking can produce serious results. Just ask John.

About Mawson Global: Mawson Global is a leader in global sourcing and a visionary in international manufacturing. With more than 70 continuous years of international experience, the team at Mawson Global has the expertise necessary to help your company maximize its global commerce potential. Our mission is to make international growth simple and attainable for all companies, regardless of size, by utilising our global experience to reduce risk and increase profit.

A Guide to Understanding Chinese Holidays

Anyone who’s done much travelling will know, no matter where you go, people are very proud of where they come from.

As a business person, the ability to tap into that loyal patriotism by demonstrating your knowledge of someone’s home country is an incredibly powerful rapport building tool. It can improve relationships, boost sales and can even avoid major disruptions to your business plans.

This is especially important when the country in question has around 1.4 billion inhabitants, is a business and economic superpower in its own right and possesses a holiday calendar that bears almost no resemblance to most other countries.

China doesn’t recognise Judeo-Christian holidays such as Easter or Christmas and instead derives its unique holiday calendar from a combination of age-old agrarian roots and modern nationhood.

For many of the holidays, dates change each year based on the celestial calendar so it’s important you ascertain the particular days designated for the appropriate year.

Here’s your guide to understanding the Chinese holidays.

January: Yuán Dán (New Year’s Day)

Although China has its own New Year’s eve marked by the lunar New Year, it does also recognise the international holiday of New Year’s Day. The rest of the world is closed for business and China follows suit for three days. While there are some minor celebrations, they pale in significance compared with the national New Year celebrated the following month.

February: Chun Jié (Chinese New Year)

Chinese New Year is very different to the New Year celebrated on the 31st of January by much of the West. Each New Year ushers in a time symbolised by one of 12 animals from the Chinese zodiac, or “Sheng Xiao”. Because the different animals represent different meanings, this holiday must be researched each year, and you can find our 2015 article here [link]. This is not a good time to do business in general.

April: Qingming (Tomb Sweeping Day)

This three-day festival sees the Chinese people spending time outside, appreciating the greenery of spring and venerating ancestors by cleaning and attending to their tombs. It’s a solemn and private period for the Chinese that falls some time in early April depending on the celestial calendar. It’s only marginally disruptive to business in the country, though some key decision-makers may be out of the office for a day or two.

May: Láo Dóng Jié (Labor Day or Mayday)

This particular Chinese holiday follows much of the West and is a three-day period starting May 1st each year. It doesn’t have any major cultural significance to the Chinese, but assume that key decision-makers and executives may take one or two days holiday either side of the date.

June: Duan Wu (Dragon Boat Festival)

The Dragon Boat Festival is a Chinese holiday that honours an ancient poet, Qu Yuan and celebrates the longest day of the year, or summer solstice. Traditionally, boats shaped like dragons are raced and although it’s not so popular these days, you may find a number of people off work if they’re participating in racing teams over this three-day holiday.

September: Zhong qiu (Mid-Autumn Festival)

This holiday celebrates a trio of interlinked principles which are prayer, thanksgiving or expressing gratitude and the gathering of family members. It’s of enormous personal importance to the Chinese people and has similar effects to that of the New Year celebration in February. If important business must happen around September, it’s best left at least 10 days before or after this holiday.

October: Guó Qíng Jié (China National Day)

Chinese National Day is celebrated on October 1st each year. On this date in 1949, chairman Mao Zedong officially announced the People's Republic of China while standing at Tian'anmen Gate. It’s common for goodwill gestures to be sent such as businesses wishing people well with full-page spread magazine advertisements. Other than that, there’s no business for around seven days, so don’t make any arrangements for the first week in October.

 

Considering global sourcing from China?

Increasingly, the huge potential savings on offer mean more businesses than ever are establishing supply chains in, and sourcing globally from countries such as China.

If you’re considering becoming one of them, but want to work with a business that has a local presence in this important country, contact us for a QuickLook Analysis today and find out how much money sourcing globally could save your business.