China Advisory Services

Industry: Distribution Services

A privately held US automotive part distributor with network of over 300 independent distributors was purchasing an increasing number of overseas products for U.S distribution. They were concerned with transparency issues and financial exposure as it related to foreign suppliers in Guangdong, Zhejiang, Taiwan, and Hong Kong. They wanted help in understanding how things were done in the Chinese business environment and accordingly, what their expectations should be; moreover, in light of any differences the company wanted to know how to minimize risk factors. The overall goal of our engagement was to provide information to the company about doing business in China and to help them understand how they could work most effectively with suppliers in the region while protecting their assets.

Our approach:

• Understand the company's current relationships with Chinese vendors and agents
• Assist with analysis of Chinese vendor and agent capabilities
• Evaluate current and future opportunities and threats
• Recommend development of vendor selection criteria and management process
• Facilitate discussion on an integrated process between procurement and finance functions, for working with overseas suppliers

Results:

• Client gained a better understanding of corporate exposure and practices they could undertake to reduce current exposure and future risk.
• Client also came away with knowledge on how to proactively align internal processes to save time and reduce the cost and effort of working with suppliers in Greater China.

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