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These are trying economic times! I have several friends who have recently been layed off. Many of my manufacturing clients are looking for ways to cut costs and bring their supply and demand into equilibrium. Cost cutting is the mantra in manufacturing and will be for the next 12-18 months.

So where are the opportunities to save and cut? One area with loads of potential is in the procurement of parts for production. If you are interested in sourcing parts in low cost countries such as China, here are some things to look for:
– high volume usage, repetitive orders
– high-touch assembly
– parts with well-defined specifications, drawings and few engineering changes
– parts with predictability in forecasting (remember, it takes longer to get products shipped from China and reaction time to changes in forecast is longer)

If you analyze your procurement buys and come up with possibilities for direct sourcing in China, get some help from consultants who have experience in this area. Their expertise will pay off in the end.

Don’t get left behind your competitors. This economic environment is the perfect time to get started.

Rosemary Coates
Blue Silk Consulting

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