At the Beijing 2003 China Auto Parts Industry Development Forum and Multinational Company Conference held on November 26th, the two major parts trading companies from the United States, the PAC Group and the stakeholders of Lakesid e, gave the Chinese parts companies on the spot. After a lesson, foreigners raised a question for Chinese automakers:
According to statistics, in 1990, there were 1914 parts and components factories in China. By 2002, this number had dropped to 1,540. With the rapid development of the Chinese automobile industry in recent years and the influx of a large number of foreign companies, this figure will continue to decline. ,and also
In other words, the competition and restructuring faced by Chinese parts and components companies will become more severe.At present, with the gradual establishment of the global procurement system, major foreign OEMs and parts factories have begun purchasing operations in low-cost countries such as Poland, India, Mexico, Brazil, Argentina and other countries and regions, including China. In 2002, the export value of China's spare parts was US$5 billion, and Frank Ogden, vice president of Asia Pacific of PAC Group, predicted that by 2010, China’s spare parts exports will reach more than US$65 billion, making China the largest share of global procurement.
Frank Ogden said at the Beijing 2003 China Auto Parts Industry Development Forum that because China has its unique advantages: the overall economic environment is good; labor costs are much lower than those of the United States, Europe, Japan, and other developed countries and regions; after joining the WTO, the original existence The trade barriers have gradually been eliminated; the RMB exchange rate has remained stable and so on, which means that the business opportunities of China's parts and components companies are huge.
However, Frank Ogden also pointed out that business opportunities will only favor those parts suppliers who are prepared to meet the requirements of international customers. In other words, before being incorporated into the global procurement system, China's parts suppliers must transform and upgrade their own companies.
Barriers to language communication, Frank Ogden calls it the first challenge. He asked how many people at the conference site were able to use English proficiently, including few people speaking, reading, writing, and raising their hands. And English is the circulation language of international business. In the one-to-one contact, negotiation, and transmission of documents and documents with international customers, English is undoubtedly a big test for Chinese parts suppliers.
Of course, in the soft environment, it also includes the differences in laws, economics, and culture between countries. In particular, cultural differences directly lead to differences in the way and philosophy of doing business. Mr. Williamv.Osborne of American Lakesid eSales Company cited a common example in China: in the United States, the quotation method is only once, which represents the actual production requirements and uncertainties. In China, the quotation is usually one that has not been strictly scrutinized. The general price of suppliers, suppliers want to finalize the price by bargaining, so they often because of quotations too high or too low and lost the opportunity to cooperate with international customers. Therefore, understanding the habits and methods of doing business with foreign customers as soon as possible is a prerequisite for Chinese suppliers to win business opportunities.
The other is to understand the needs of customers. For foreign buyers, they require low-risk, low-cost procurement of high-quality products. High quality includes the supplier's own quality, project management capabilities, technical development capabilities, engineering service personnel, etc. must have a higher level, and at the same time be subject to competitive prices, and at present, China's spare parts supply Most businesses fail to meet this requirement. Therefore, Frank Ogden suggested that Chinese parts suppliers should upgrade their quality levels as soon as possible. This includes the establishment of a quality system in line with international standards. F RankOgden specifically mentioned quality planning and control. He pointed out that the U.S. domestic suppliers can generally find the problems that may arise in the products in the bud, solve the problems as soon as possible, and report and correct them in time, so that it will not attract the attention of senior management personnel of the buyers. However, due to the fact that Chinese suppliers are far away and cannot improve on-site technical services, the quality problems often accumulate over time, causing the attention of senior management personnel of buyers. It is easy to lose trust and lose the opportunity to cooperate again. Therefore, ensuring that products reach a higher quality level before exporting is a challenge for China's parts suppliers, and it is also the key to seize international customers.
For Chinese parts suppliers, successfully obtaining international customers also needs to understand their business operations and customer operating specifications. Frank Ogd en described in detail the three stages that component suppliers need to pass to become qualified OEMs.
The first stage is the supplier's selection and approval stage. During this process, the supplier must provide its own project plan, resource plan, target product, quotation, etc. to the buyer, and the purchaser is evaluated and finally determined The supplier. In this process, China's spare parts suppliers should be familiar with the assessment and approval process and habits of international customers, and provide relevant information to buyers in a timely, accurate, and truthful manner.
The second phase is preparation for the production phase. It is very important in this process to communicate with international customers. Including timely provision of samples and technical documents, inquiring buyers' requirements, conducting product quality certifications, changing production control processes, etc. This is the so-called Advanced Quality Planning and Control (APQP).
The third stage is the stage of supplier's production and continuous improvement. In this process, we must further improve quality, logistics delivery, and service. The successful completion of the third phase will mark the supplier’s approval by the buyer and start the next cycle of cooperation.
The acceleration of the process of globalization and integration of the world economy will inevitably involve China's parts suppliers in the wave of global procurement. Who can be invincible in the end? China's parts suppliers must be prepared. (Wu Ying)