What are the two Most Frightening Words for a Foreign Purchasing Manager in China? Part 2
No Problem (没问题) and Very Easy (很简单)
In part 2 of this document I hope to address why I fear the words, “no problem” and “very easy” the most in China. Also, I will share a few more stories and issues that can arise in the sourcing industry in China.
1) If you are using a sourcing company to help you source products in China, more than likely they are getting a kickback on each sale. That will be in addition to fee’s they will charge you. In addition, they may not choose the best quality supplier for you, because the kickback is less. In China, if you are the purchasing manger of company, this is big incentive of the job. For large companies that do lots of purchasing, this grey income could be larger than your yearly salary. From the Chinese supply company viewpoint, if the purchasing manager accepts your kickback, this will ensure that he/she will keep coming back to you for business. As long as you are getting a competitive price that you are ok with, I wouldn’t worry about the kickback. For me, it’s more about companies not choosing the best supplier because the kickback is lower. The only way to avoid this is by having your own team do the sourcing directly. Just be careful that your own purchasing manager doesn’t also become tempted to make some easy money.
2) When I was brought on board as a consultant, one of the biggest issues we had was with loading and packaging of our products. I was told that for the past 4 months, every time they would open a container on the US side the workers would run so as not to get crushed by the products. We had large steal and metal items that were on pallets. Although they had given clear instructions of how the pallet should be loaded and where braces and brackets should be placed, these instructions where ignored. I addressed this issue in the following way:
a. Establish a friendship between you and the GM of the factory — The first part goes back to part 1. If your supplier is your friend, he will make sure to take better care of you. Building up this relationship will ensure that things are done properly even if they cost a little more.
b. Be afraid if a suppliers common response is “No problem or very easy” -Along with part a, I decided that on my next visit before the shipment would be loaded I would pay a visit to the factory for an inspection. I also ordered that they bring in a truck so that we could test their packaging design. Upon arrival I confirmed that there was only a few minor problems with the products themselves. From there, I asked where the truck was for the test. This is when I heard the phrase, no problem (没问题). He was implying that the test was not necessary and that his design was flawless. You mostly hear this phrase from Chinese that have never left China and haven’t done business with lots of international partners. It was always alarming to me when I heard it because they are so quick to say it. I also know I will need to take even further measures to ensure quality at every part of the process when I hear it or the phrase “very easy” (很简单) . I had to remind them and show them pictures of how containers show up in the US for them to finally concede to carry out the test. They tied down three pallets of products on a mini truck to drive around. I originally wanted them to drive the product around for 3–4 hours but after some discussion I agreed upon settling on an hour and half. I thought they tied down the product too tightly as well but I decided to let that item slide. Before the driver took off, I took a picture of his odometer to ensure he didn’t just drive around the block have a few beers and then drive back an hour later. Upon the truck returning to the factory it was immediately apparent that the pallets had failed and the products were damaged. I took pictures for my reference and for any future time he thought “no problem” was an acceptable response.
c. Don’t throw away business principles you would follow in the US — Chinese will always try to tell you things are not necessary. You need to be able to ask the right questions and really be able to dissect what they are saying. Chinese don’t like to answer questions directly so you have to know how to get the info you need. Be true to your principles of how you would behave in the US. If you would watch every container loaded and stay at the factory in until 12am in the morning to ensure every container is loaded properly in the US, be sure you also do that in China. Additionally, don’t be afraid to get in with the factory workers and get your hands dirty to show that you really wont something done a certain way. High level Chinese mangers wont do this because there is a clear divide between workers and managers but the Chinese workers who get paid barely anything and are working in the cold and long hours on your product will respect you for it and may even feel more motivated to do it right for you.
