China Sourcing: Strategies, Methods and Experiences

Citation

Cousins, P.D. (2007), "China Sourcing: Strategies, Methods and Experiences", International Journal of Operations & Production Management, Vol. 27 No. 3, pp. 342-343. https://doi.org/10.1108/01443570710725581

In his best selling text “Collapse” Jared Diamond presents a thesis of why civilisations grow and why they eventually collapse. Essentially his argument is around the allocation and use of resources, both locally and to an extent globally. China has caused great concern amongst Western economies because of its requirements for “world” resources, such as basic raw materials like steel and iron for construction and energy to fuel its massively expanding economy. As well as absorbing resources China is also a massive potential market place to sell as well as buy goods.

The political and cultural development of China from a Confucian‐based society within a command economy (focus on the good of the whole) towards a more capitalist model (focus on the good of the individual) has created a need for consumption amongst it citizens for Western goods as well as a desire to trade on a global basis. At the same time, the opening up of trading borders locally with India and internationally with membership of the World Trade Organisation has given access to Western firms who see China as a lucrative source of supply and production; with average recorded savings on production costs (compared to Western supply) of around 50‐70 per cent. Whilst there are indeed risks with trading with China such as transportation costs and loss, building of relationships, legislation, copyright and language, it is clear that the benefits outweigh these costs.

This book takes the reader through some of the political and cultural developments of China based on a research programme that was undertaken by the authors. It gives a practical guide to how to do business in China and also discusses some of the pitfalls and possible avoidance strategies that practitioners may follow. This is a research based book based on a series of case studies which are included (in detail) at the end of the book.

Most leading Business Schools now teach global sourcing as part of their main Operations and Supply Chain programmes. This book is ideal for academics that are teaching international/global sourcing programmes and want an introductory text that focuses on the development of China. It is also a very useful background read for practitioners who are thinking of doing business in China. It gives some good practical guidance as well as some essential background reading.

The book consists of nine chapters. It begins by examining the International Sourcing (IS) literature and gives a brief overview of some of the key issues facing firms from an IS perspective. There are some useful models and concepts which focus on how Western firms might organise to manage their global sourcing programmes. The second chapter discusses the economic background of China and furnishes the reader with a range of important, useful and interesting facts regarding the size and scale of economic development. Chapter 3 outlines the research project which contributes to the development of this book and identifies some key case study companies which were used as part of the research process. The remaining chapters take the reader through some specific issues with sourcing in China, these including various sourcing strategies, legislation, management of relationships and transportation issues. The book concludes with some detailed case studies of Western firms who have set‐up business in China. These cases are interesting and offer some good insights into the difficulties and successes of managing a global sourcing strategy.

In summary, this is an interesting and easy read. The main section of the book is not large and therefore not imposing. It is well written and practically focused. In my view the downside of this book is that it is trying to appeal to both practitioners and academics. It might be argued that it lacks sufficient theory to be taken seriously as an academic text and it may also lack sufficient detail to be an essential read for practitioners. Nevertheless, I enjoyed this book, it gave me some good insights into thinking about some of the problems and advantages of managing a global sourcing strategy and in particular into the phenomena that is China.