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01.07.11 – textile network: Optimising sourcing strategies

Inverto GmbH asked Chinese textile producers how they see the sourcing situation for the German textile sector.

Gone are the (wonderful) days when sourcing products in China was never a problem even at short notice. These days, ever more companies are complaining of drastic price increases and delivery bottlenecks. Set against this backdrop, sourcing consultancy Inverto GmbH (wptest.inverto.com) asked Chinese textile producers* how they see the sourcing situation for the German textile sector, giving rise to some interesting findings. Accordingly, China’s textile makers stated that the high price of raw materials was less of a problem as their international customers tended to accept this predicament without question. The real bone of contention is the sudden leap in labour and wage costs of up to 20 per cent in the last year alone, which now account for around a quarter of total costs. Even so, the new low-cost countries such as Vietnam, Cambodia, Burma and, in the medium term, the African states, are not really considered serious competitors. The Chinese confidently refer to their advanced knowledge based on years of experience in manufacturing, to their higher output and superior quality. And what about the widespread suspicion that Chinese customers are becoming far more attractive for Chinese producers, thus leading to inflated prices for German customers? There was general consensus that foreign accounts are clearly given preference over Chinese customers, not least because foreign clients are considered more reliable. European countries enjoy a particularly high standing, with Germany, France and the UK being singled out as China’s most important partners. German customers are appreciated for their precision – even though cooperation is often more complex than with other customers. This is due, amongst others, to more regular on-site self-audits, environmental and sustainability concerns and social standards.

Inverto’s partner and textiles specialist Kiran Mazumdar would like to see a reliable information network set up along with intense public relation work on all sourcing markets, including China. This would bring about significant improvements to the overall negotiating situation. Sontaneously I remember the good, old saw: As always – actions speak louder than words!

textile network, 7-8/2011
www.textile-network.com

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