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.
