Find out how QSR procurement executives can achieve 'The China Price'By Andrew Burgess
Flashing lights and fancy photos, Promise of exceptional quality and world beating prices, Pristine factories and innovative solutions. These are what even the most discerning of procurement executives will find when they start their search to import products and achieve the “The China Price.”
Australian QSR brands have an appetite for take away packaging from Pizza Boxes to coffee cups, From Noodle Boxes to serviettes and everything in between Australia consumes enormous volumes of packaging and the appetite for savings by importing with the buoyant AUD is ever present…..
BUT…. What you see is not always what you get as many soon find out. Buyers will often cast the net out far with a detailed “Request for Quotation” when looking for products, trade platforms like Made In China and Alibaba are invaluable resources and all have some great manufacturers associated.
Typically International procurement executives will take the pricing from 6 or 7 manufacturers and then depending on price, communication, samples and promise will narrow the search to 2 or 3 suppliers and often hop on a plane to the promised land of the far east in search of that bargain armed with contact details and pristine samples. The stumbling block in this process is you are pigeon holed into dealing with the suppliers you have contacted from back home and often a way down your journey.
But be beware…. what you see is not always what you get, Leaking cups and poor grade board. Promise of 30 days manufacture times and 3 months later still no product.. Orders have been put to the back of the queue because of a huge order into the U.S or Europe and thus putting pressure on Australian manufacturers that we have given the boot as we have our new “China Price.”
Well-educated, well spoken, well mannered local staff will greet you at the airport and lunch is usually the first item that will be on the agenda. Business in China is conducted very different to how we negotiate here. Its almost a reverse process of managing up from the base price. The focus is firmly on the relationship and the “Guanxi” and this is imperative for long term success. It’s relationship first and business second and manufacturers are easily offended by a declined lunch or dinner appointment. Then there is the issue of lost in translation as you need to manage the production and process between the sales team, the promise, the engineers, and the production staff and carefully find the key people to make this process as efficient as possible.
For our ever growing QSR sector there are some fantastic opportunities offshore with our Asian counterparts, many manufacturers do a great job and deliver exceptional product, but do your due diligence, don’t pay deposits until you are 100% satisfied, return to Quality Control your jobs particularly when the relationships are young or use a reputable Quality Control partner based on the main land. But most of all respect the culture and the process, find manufacturers with leading clients and good referrals are invaluable. Take your time, “YES” doesn’t always mean “YES,” and remember and respect the process to achieve the “China/ Asian Price.”
Having worked within the QSR industry for some 20 years particularly in the franchise sector I have seen national and international QSR brands make fantastic savings and few board room heavyweights raise there eyebrows at the improvement on the P&L’s from well run international programs but as they say “Rome wasn’t built in a day” and it takes time, capitol and patience to get it right.