Language

English

Main objective

Open a Chinese office

1. The client’s problem

Our client was a major player in the retail industry, with over 30 stores. Since their beginnings, they had always operated in similar fashion by buying from importers and were now looking to change their current business model to a direct approach with Chinese suppliers who could offer similar products at much better price. The objective of this strategic change, was to have complete control over their supply chain all while raising profit margins as buying price was expected to go down 30%. Therefore, in order to complete this strategic shift, they had to complete review and renew their supply chain operating model to stay ahead of the current curve of other retailers in their category who were now cutting prices by working directly with suppliers.

2. How we solved the problems

In order to support their strategic effort, we we’re given the mandate to implement and support a buying office in China. We then first started by analyzing each products and potential suppliers across the country to find best suited solutions and alternatives that would allow them to reach their pricing objectives all while keeping current standards of quality. After a thoroughly analysis we selected the qualified suppliers and the first trial orders were given. We then established a quality control department in order to resolve previous quality problems and set up a more efficient payment structure that would protect them from receiving default products. As well, this allowed us foresee problems before shipment and guarantee fast decision making at the point of action for our client resulting in shorter lead time.

3. Results

In the end, this project helped our retail client in many aspects as it gave them direct access to lower labour costs suppliers - therefore increasing their competitiveness on their market. It also allowed them to have much greater flexibility and more control over their supply chain, allowing them to be able to shift faster from products who we’re not selling as expected.

Since then, having a Chinese office as given them a key advantage as their production ecosystem offers them a hard to match concentration of input suppliers, assembly factories, skilled workers and service providers. It also gave the client the opportunity to penetrate new markets with aggressive pricing strategy supported a large decreased in costs.

Language

English

Main objective

Reduce per unit cost

1. The client’s problem

The client was a major global actor in shared mobility system. The problem they were facing is one where the competition was getting fiercer, prices we're getting lower, and they were having more difficulty closing clients. The cost structure was too high and the supply chain was not diversified enough. They needed to reduce the cost structure in order to remain competitive.

2. How we solved the problems

The supply chain was moved to Asia after a thorough analysis of each products and of each potential suppliers. By working with detailed specifications done by engineers, suppliers for each type of products were found in different areas in China. Qualified suppliers were chosen after a thorough process and by visiting them to see first hand, who could do the job the most efficiently possible by respecting the client quality standards. In the end the mandate was clear, the products in Asia needed to be an exact replica of the ones previously manufactured in North American market as a key aspect of the project as new components needed to retrofit on existing systems.

3. Results

By having someone on the ground to supervise the product development and assure quality and timeline follow-ups, the company was able to save about 40% of their production costs and regain their place as the top global player in their industry. Having someone permanently on the ground and speaking the same language had put the client’s mind to rest and had allows them to concentrate on what they do best without worrying too much about their supply chain in Asia. In the end, it became much easier to close more sales just by letting the supply chain operate in Asia at much lower costs. As for the retrofitting, nobody can tell as to where the parts are now manufactured.

Language

English

Main objective

Replace Chinese Managers

1. The client’s problem

The client was a manufacturer and distributor of household furniture and already had an office in China with local people managing it. The problem was one of efficiency and communication with local employees. By having no eyes and ears on the ground, and no manager who understands the reality of North American companies, it was increasingly difficult to know and understand how production was going, what was slowing supply chain processes and what could explain the raise in default rates.

2. How we solved the problems

Our team of Canadians in China, took the role of office manager and we’re now the point of contact in Asia for the client. By being on the ground to manage the operations, it was now clearer for everyone what was going on with the suppliers. It was also easier to negotiate prices, accelerate processes and demand more concessions – such as inserting a container between those of other clients for quick turnarounds. This on-site approach is very different from would you would get from business trip to China for a week or two. It’s much easier to demand concessions from suppliers if you are on the ground and they know you can come knocking on their door any given day.

3. Results

The supply chain was running much more smoothly, current suppliers were evaluated more closely and the ones not performing on par with the standards were replaced by other ones who could do the job more properly. Having eyes and ears on the ground gave more confidence to the client . It also made negotiations with the suppliers easier and it was also easier to get more concessions from these same suppliers. Also, we did realised that some of the local employees we’re receiving kick-backs from certain suppliers – we then took the necessary steps to ensure that operations we’re transparent and that local employees for working in our client best interest.