New Asia Sourcing Strategy Brings Increased Efficiency & Profitability for Consumer Retailer
While the client already had established purchasing offices in China, the increasing cost base in China during recent years forced the client to increase its efficiency and decrease costs in order to remain profitable.
Asia Perspective was contacted by the client to assist in reviewing the supply chain and setting up a new sourcing strategy in Asia.
The recommendations put forward by Asia Perspective assisted the client in improving efficiency of operations and to reduce costs through the new sourcing strategy to increase the profitability of the company.
The client had already established a presence in China but was facing increasing pressure due to the rising cost base in the country.
In order to remain profitable and competitive in the marketplace, the client needed to improve the efficiency and decrease costs through its sourcing strategy in Asia.
As a result, Asia Perspective was contacted to assist the client to review the current supply chain set up as well as assisting in setting up a new sourcing strategy in Asia.
As part of the project, Asia Perspective also assisted the client in benchmarking the functions and areas of the client with industry peers, in order to re-adjust and optimize the sourcing setup to better cope with the local market characteristics and drive profitability.
The project was carried out in three steps: As-is Analysis, External Analysis and Benchmarking and Recommendations.
Several sources were used in order to gather the data for the project including in-depth interviews, internal work documents collected from the client and data to benchmark from industry peers in China and other Asian countries.
Asia Perspective’s evaluation and analysis of the client’s operations in Asia followed the SPRO framework comprising of Strategy, Processes, Resources and Organization.
Asia Perspective also assisted in the set-up of legal structure and administrative processes for all 4 new entities along with the process set-up for financial and administrative routines.
The work and report provided by Asia Perspective in setting up an improved sourcing strategy in Asia greatly helped the client to achieve the necessary costs reductions in order to remain competitive in the industry.
By adopting the model proposed by Asia Perspective, the client realized operational cost savings of 4.3k USD/Month compared to the previous set-up.
Based on the new sourcing strategy, the client was also better prepared to cope with the company’s estimated growth ahead as well as any unforeseen challenges.
By utilizing the set up geographical strategy and hybrid organizational model, the entire organization of the company was also more aligned towards the same goal and the changes of internal processes further ensured high quality standards of products and the set out targets for CSR were met.