A case study of selecting suppliers in China

Abstract: Based on current competitive market, supply chain becomes to be more and more important to overall corporate strategy. Finding good suppliers makes much more senses for the companies nowadays as purchasing is one of the basis parts on the upstream of the supply chain. China has been very successful on turning itself into a production powerhouse in just two decades, so how to find and select the convenient suppliers in China is a very important and modern topic. The thesis has been starting with the introduction part, where the importance of outsourcing, Chinese current manufacturing capabilities and some other factors will be introduced. Besides, the purpose of this thesis is to study and analysis the criteria and processes are used by PCH International on the selection of suppliers in China. The authors try to understand how foreign companies find the right Chinese suppliers based on a case studying, which is PCH International, an Irish company. Within the theoretical framework part, the authors discussed the supplier selection criteria firstly, which are very important and necessary to evaluate suppliers’ performances. Then the thesis was provided with an insight into some common theoretical methods, which followed by the supplier selection processes. Total Cost of Ownership, Data Envelopment Analysis and Mathematical Programming are presented in basic term. The part in the theoretical review was informed about the structure of the supplier selection process, starting with the preparation step, followed by prequalification and evaluation steps and resulting in the final selection of the suppliers. In the methodology part, the approach for the research will be presented, it will be divided into four parts, which are choice of topic, choice of method, data collection, research’s validity and reliability. The empirical finding part consists of practical information which was provided by the case company mentioned above through questionnaires and interviews. The values of the evaluation criteria are depend on the respective goals. For data analysis, the theoretical evaluation models, on the other hand, are not used by this case. The company uses their own methods which are presented in the empirical part as well as in the analytical part of this thesis, the reasons will be describe carefully in this chapter. Finally, this thesis ends with a conclusion, which with the answer of the research question.