On a slowboat from China...

Pay peanuts, get monkeys. That's one of the conclusions of a new US study: the China Trade Management Strategies Benchmark Report. "Performance problems with China-based manufacturing partners can be one of the most critical issues...price-based supplier selection can be the wrong strategy," says the report.
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The report and survey was compiled by research company Aberdeen Group of Boston, and sponsored by E2open.

"Enterprises can easily underestimate the complexity of creating a financially successful trade management strategy in China," says a spokesman from E2open, a provider of "software-as-a-service to manage inter-company processes."

"An appalling 42 percent of survey respondents had order-delivery times of greater than 60 days," said Chris Jones, Aberdeen's senior vice president of value chain research and one of the authors of the report.

"One expects these long lead-times associated with slow-moving but low-cost conveyance within China and through to the consolidation strategies used to maximize logistics asset utilization. The opposite is true; 89 percent of respondents with the highest logistics costs had the longest order lead times."

The report indicates that a successful China trade strategy requires enterprises to take an "end-to-end management approach", and focus on logistics quality and reliability, rather than product pricing.

The China Trade Management Strategies Benchmark Report: How Companies Are Managing - and Improving - Their "Inbound from China" Supply Chains can be downloaded here:

http://www.aberdeen.com/.../China_093004b.asp?spid=30410001

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