While being aware of the risks, many companies do not actively manage and monitor their Chinese suppliers and most lack the ability to fully trace faulty imported goods or replace their suppliers in a crisis.

The Quality Executive Board (QEB), a provider of best practices research, executive education, and decision-support services to chief quality officers and senior process excellence leaders has announced the results of a survey, entitled ‘Supplier Quality Management Practices for China’, which highlights best practices and major risks for companies sourcing from China. The QEB is a membership program of the Corporate Executive Board, the network for leaders of the world's largest public and private organizations.

Seeking to help executives at large companies benchmark their supplier quality management practices for China and to identify common challenges, the QEB undertook an extensive survey of current practices and perceived risk factors. The Board's analysis reveals that there is still no substitute for having a good team on the ground: companies who are most confident about their Chinese suppliers rigorously screen and qualify those suppliers. In-person plant visits are universally popular and viewed as highly effective. While all respondents agree that the most effective way to monitor suppliers on a continuous basis is to have company staff placed at the Chinese supplier, only 17 percent of companies employ this method.

Other key findings include:

- Only about a quarter of companies have contingency plans to replace their Chinese suppliers: companies voiced significant concerns with Chinese suppliers, including poor product quality, loss of data privacy, intellectual property violations, and reputation risks such environmental pollution, product safety issues and human rights violations. Yet most had no contingency plans in place to replace their Chinese suppliers in the event of a crisis.

- Companies have great difficulty maintaining traceability of goods sourced from China: Only a quarter of respondents report certified full traceability down all tiers of their supply chain.

www.executiveboard.com

•Date: 28th Sept 2007• Region: World •Type: Article •Topic: Retailing BC
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