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China is the most crucial supplier of chemicals to the pharmaceutical industry because it is not easy to find the alternatives that they have to offer. But there is a lot to consider when sourcing from China. But you have to do a lot of homework. IN this podcast Oliver Rhode will share his secrets to success with Chinese suppliers of raw materials.
Oliver Rhode is the CEO of XENOPS Chemicals and an expert on raw material sourcing from China for the pharma industry.
Choosing Suppliers and Building Relationships
Choosing the right supplier in China is not easy, and Oliver recommends to have contact people who know the market, the laws, and have good connections with manufacturers in the country. For example, China has changed its environmental policies, and the companies have to comply with it very quickly. Therefore, it is crucial to know how well manufacturers are ready to deal with the new regulation; otherwise, they may be susceptible to a closer. Without having someone on the ground to know the law and the manufacturer’s standards, companies may close deals only to lose the whole supply chain. If companies have mediators on the ground, they can avoid such problems in advance.
It takes some time to find the right supplier for each purpose because there are so many companies in China; it is essential to perform extensive background checks. Those checks must prove high-quality standards, compliance with laws, and financial stability.
Cultural Differences
Each country has its own culture, and complying with it is the cost of doing business. In China, relationships are the most important thing. Companies must show up in person, even several times, and show that they are committed to a long-term relationship. It can take up years to build the right level of respect is achieved. Moreover, rushing Chinese to close a deal would more likely kill it on the spot!
Although China is an excellent source for material, companies must have secondary suppliers across the globe, even if the raw materials cost more. There is always a chance for a supply disruption from one country or even continents. That could happen due to a change in laws, war, or a pandemic.
