Securing Your Supply Chain in China – Part 2
Part 3 starts off with a case study of working with a car accessory project (wanted a quality product at a savings) that started with 30 suppliers, and then narrowed down to 5..
but there were some issues:
- All of them were trying to aggressively looking to expand to U.s., so educating a potential competitor
- Decision was made to find to use his firm to do assembly, packaging, and export as a firewall
- no big surprise, and the case is pretty basic
For anyone dealing with a commodity like brake pads, this is going to be the case. Especially if one can find 30 suppliers that are readily accessible to a search. Were the product more specialized, perhaps the maturity of suppliers would be lower, but one would be hard pressed these days to find a supplier that is not going to Europe for a trade show.
The big takeaway from this part is that it is best to use a firewall, and I agree wholly.
- It prevents the supplier from identifying the ultimate buyers and going around them
- Quality assurance
- Money flow
In all cases, we have a firewall. Some are more creative than others, but there are components that remain throughout, including an entitiy in the U.S. that imports all the goods in our name.
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