China....Friend not Foe

Being involved in the running of a Scottish based engineering company, it was inevitable that we would be impacted upon by the re-awakening of the eastern power house that is/will be China.

However, the odd thing is, is that this contact has been an enabler. This contact has added to our competitive advantage, it has added to our 'tools' in the market place. I wrote a short piece for a public body after they supported us in one of our forays into China and I would like to quote it here:

"As a company we have to be pragmatic and realistic, we trade in the market conditions that exist, not the conditions we would prefer. We are all aware of the media headlines about the effects of globalisation and how China, in particular, is a threat to manufacturing in this country. It can be either depending on your approach.

In our company, we first started purchasing from China 10 years ago, these were simple steel cast parts which couldn't be sourced in the UK; but this started a very productive relationship with a range of businesses in China. This modest start allowed us to develop our relationship as we built our capability to manage a much extended supply chain.

This has not cost us jobs, in fact it helps win orders, grow the business and secure jobs. For example, over 5 years ago we lost major product lines to Eastern European manufacturers as some of our large multi-national customers globalised their supply chains. We lost those orders and our reduced product portfolios weakened our strategic position and ROI in relation to these accounts.

Over the last year we have developed our supply chain capability and by extension, our relationships with Chinese suppliers to such an extent that we have now recovered these lost product lines. We import the product from China, finish 'near to port' in the SE of England and supply direct to the customer. This development is helping us secure our position as a strategic supplier with large multinational customers and in doing so secures jobs at our company, here in Scotland, as we design and manufacture higher value equipment that would have been put at risk otherwise.

By being involved with the Council's trade mission to China, our supply chain manager moved a number of projects forward. In fact, part of the work undertaken on this visit, recently resulted in a single £76,000 order for a product we have not made in our factory for over 6 years.

So Globalisation can be a threat, but it is also an opportunity. It provides markets to sell goods and services in, it also provides other opportunities to be competitive elsewhere. If you look upon it as a threat, a threat is all you will see."