Chinese Supplier Negotiation for a Global Plywood Machine Manufacturer

The client, a global market leader in plywood machinery solutions, has had an established workshop in Shanghai for more than a decade. Now, the client faced problems related to quality and budget control with some of their current Chinese part suppliers.

Therefore, the client had identified new potential full solution suppliers, and turned to ARC Consulting for help with reviewing them, negotiating with them and draft commercial contracts. This was to be completed within 30 days.

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The global manufacturing industry has been greatly influenced by the COVID-19 in many countries, including China. However, China’s effective containment measures have resulted in both social and economic stability, offering a broad supplier base to international enterprises looking for stability.

As the client faced a limited timeline, as well as a need to get better cost control of the whole project, Chinese suppliers offered a great opportunity for the client to achieve both timely deliveries and great price.

The project consisted of three main tasks. The first task was to evaluate the suppliers from each category and confirm our client’s required specification with them. The second task was to bargain on the total cost for each category, helping our client reach a competitive price point. Thirdly, ARC Consulting helped to draft the commercial contracts and come to an agreement between the client and new suppliers.

  1. Supplier due diligence
  2. Price benchmark
  3. Supplier negotiation

The client successfully signed cooperation agreements with suppliers from two different product categories, and thereby ensured that their short timeline could be met. With the completion of the project, the client successfully finished their project, and avoided any risks of paying any compensations for delays.

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