Avoid Tariffs: Diversity Your Supply Base

2018-12-06

A common discussion we've had with clients and prospects over the last several months has included concern regarding the current tariff situation between the U.S. and China. Organizations representing diverse industries are scurrying to secure inventory outside of China and identify new sources for future procurement. Alexander Parker recently posted to our blog related to this topic: The U.S. - China Trade War Creates Demand for Sourcing Diversification http://blog.proqc.com/the-u-s-china-trade-war-creates-demand-for-sourcing-diversification As Alexander notes: "Diversification to suppliers from various countries will lead to a more robust supply chain that allows for resilience in times of uncertainty like now. However, companies that have limited resources or time to find new suppliers may find it very difficult to locate and transition to these new facilities." Pro QC provides guidance and support related to the identification of new suppliers and leverages local expertise. Whether it's Mexico, Vietnam, India, Thailand, or other locations, Pro QC assists to identify needs and supplier requirements and then conduct a local search and qualify potential matches. We follow-up with recruiting solutions and ongoing quality control and development/improvement support. An initial search filters each potential supplier using custom or standard variables that include: Organization Type Export Locations Number of Employees Years in Business Certifications Quality System Details Product Range Number of Production Lines Software List Equipment List Capacity Information Supplier characteristics noted as important by our clients include: Cost Lead Time Flexibility On-Time Delivery Available Capacity Quality Collaboration Location Reputation Customer Base Financial Health Product Development Social Responsibility Additional information related to pricing is available as well. We coordinate the collection of samples and other details per request. In addition, Pro QC follows up with on-site Initial Supplier Evaluations. An Initial Supplier Evaluation includes a one day on-site evaluation of: Management Engineering Quality Control / Assurance Incoming Receiving Inspection Manufacturing Packaging Non-Conforming Materials Corrective Action Inspection & Test Equipment An example report is available here: https://proqc.com/wp-content/uploads/ProQC_ExampleReport_Initial_Supplier_Evaluation.pdf Many organizations utilize their own Supplier Qualification forms. Pro QC can work with existing templates as a true extension of your organization. As Alexander noted in his blog post: "It is important to remember that despite China potentially losing some market share to other countries, they will still account for a major portion of trade in the world. For example, China still accounted for 35 percent of global clothing exports last year. Rather than China backing down during this time of intense pressure, the Chinese government and factories are going to respond by searching for methods to increase competitiveness by finding alternative markets, increasing factory automation, and creating more value-added products. Factory owners are not going to be willing to give up and shut down their businesses, but will become increasingly more innovative. (McDonald, 2018)" Contact us for additional information and support.

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