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Global Supply Management - China sourcing for an engineering company

A leading UK component manufacturer found itself under significant price pressure by competitors. Bought in components were over 70% of the final product factory gate price. Most were being sourced from the UK. They recognised that they could get significant cost savings by sourcing from China, but had concerns.

•	How do they identify and negotiate with Chinese suppliers?
•	How would they manage suppliers in China? They felt that they did not have the capabilities or experience to manage Chinese suppliers.

NovoSupply’s support ranges from requirements to managing the local supplier

•	Requirements definition and supplier identification: NovoSupply works with the client to identify parts and categories suitable for sourcing from China. NovoSupply also puts together requirements packages. In parallel NovoSupply identifies capable suppliers from the database and through research.
•	Sourcing projects – from negotiation through to validation: Our team runs several sourcing projects, using our eSourcing tools. Savings delivered between 18 to 34%. Shortlisted suppliers – based on price and capabilities – are validated by our country managers.
•	Supplier Management: Country managers in China, supported by our multi-lingual supply team set up all logistics and financial processes. They manage the supplier and the client to ensure that shipments take place on time. Quality issues are able to be flagged early and resolved, due to the constant communication between all parties, co-ordinated by NovoSupply through the supply team and supply management tools.

NovoSupply delivers savings and builds capability!

•	The client is able to shift over €80m worth of spend to Chinese suppliers in a period of 12 months, with a saving of over 22%. NovoSupply also deals with the risks at all stages and ensures that the client was protected.
•	The client gradually deals directly with the suppliers on some parts. Their staff develop their own skills and understanding by working with NovoSupply staff.