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Supply Chain: Distributing in China

By: Simon Kaye, Jaguar Freight
Posted: April 2, 2008, from the April 2008 issue of GCI Magazine.

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Chinese supply chain networks should not be attempted without help, and without relying on seasoned guides who know how to improve throughput, navigate an evolving market and deal with local bureaucracy both at and beyond the ports.

In China, it is important to have a method for collating data and keeping track of all freight in a way that creates a provable and thorough paper trail. Crime, loss and institutional corruption must all be taken into account. The modern supply chain strives to solve vendor problems by providing transparency and listening to the needs of the people at the receiving end.

Joint ventures with established Chinese companies that are looking for foreign capital and products are often a good departure point for companies just getting started in China and who are ready to learn the ropes without taking on too much risk.

Personal relationships cannot be stressed enough when it comes to understanding Chinese business culture and in cementing agreements. By taking advantage of established freight-forwarding agents in the region, a business can increase its ability to get results and track its goods effectively.

While things are constantly changing and evolving in the Chinese business world, there are centuries-old practices that require a deep understanding of the culture. Especially when dealing with such typically Western goods as cosmetics, a business has to be very careful about the way products are distributed and the way civic and cultural interests view the products that are imported into China, or the raw materials that are taken out.