5 Useful Tips for the Importer’s Year End Review
December 4, 2015
With the 4th quarter coming to a close, most company leaders think about two elements of their management: the year-end review and the planning of the next year. That said, for those companies whose business model depends at least partly on importing from China, this is the time for a thorough analysis of your China sourcing program. Review and planning are key to getting a head start on making next year a banner year. Here are 5 tips I thought of to help you wrap up the year and get motivated about the next one coming.
1. Review Year-to-Date Results
Before you begin a new year, it is important to critically review the performance of the previous year and see how different elements of your China sourcing program performed against expectations. Were goals met? Take this a step further and compare the year’s performance against the prior year’s. Establishing where you really were and how far you have come will help you with your vision of where you should be and what you should do next year.
2. Perform a SWOT Analysis
In the process of reviewing the previous year, a good exercise is to perform a SWOT analysis to solidify your vision, get a no-nonsense perspective and secure a better footing on the coming year. This exercise can be done in 15 minutes or 5 hours, depending on how detailed you want to get. But even a 15-minutes SWOT analysis on your China sourcing program is better than none.
- S: Strengths – What are yours? How did they affect you this last year? What improvements have you made that really paid off? Ask yourself what you delivered and what worked well for your sourcing program during the last 12 months.
- W: Weaknesses – We all have them, better to know what they are than to pretend they do not exist. Take a hard look: what are the weaknesses? What went wrong during the year? Determine where your importing practices hurt your bottom line and how. Knowing the problems will help you begin to create solutions.
- O: Opportunities – What is out there that can help your business model? Think of government policies, freight rates, global trends, and structural aspects of your industry or business. Which of those can you take advantage of? Which of those help your business grow? Identify and list the opportunities, lock them into your sub-conscious.
- T: Threats – The other side of the coin are the threats that exist but you cannot control. What stands in the way of your success? Identifying threats ahead of time will help you counter them. Being well prepared for the worst will help you operate and manage your China sourcing program effectively and optimally.
3. Benchmarking: A reality check
“Keep your friends close, and your enemies closer.” Are you good at what you are doing? Based on what? Are your suppliers the best for you? How do you know? Benchmarking is what will help you measure that. Cher Wang, CEO of HTC, once said “It takes humility to realize that we don’t know everything, not to rest on our laurels and know that we must keep learning and observing. If we don’t, we can be sure that some startup will be there to take our place.” That said; make it a regular practice to benchmark your suppliers against other competitive factories to ensure that you are getting the best possible deal. But don’t stop there. Benchmarking against your competitors will also prove beneficial. How are your processes doing compared to theirs? Knowing how you stack up in your China sourcing program and against your peers will strengthen your position as an importer and prepare you to do even better next year.
4. Identify goals and KPI’s (Key Performance Indicators)
Settings goals and planning ahead is key to success with ANY China sourcing program. You’ve determined what you HAVE done, what you COULD do, and now its time to determine what you NEED to do. Set a series of goals for the company, for you, for your team, and determine what it will take to reach these goals. Make those goals SMART (Specific, Measurable, Attainable, Realistic, Timely). What are the most important factors to you? Quarterly benchmarking the factories you’re working with? Regular quality control audits? Tie your goals to KPIs to give you and your team a vision of the actual progress and ability to keep track of reality. Be clear and realistic about what needs to happen in the coming year to attain your Ultimate China Sourcing Solution. Be specific and set a time frame on your goals. Track those KPIs on a weekly basis (some track on a daily basis), to make sure things are going according to plan.
5. ROI (Return on Investment)
Last, but certainly NOT least, review your ROI. What exactly was your investment in sourcing? Did you get a good return on it? How did your China sourcing program affect your bottom line? Make a list of investments (think in terms of time and resources, not just money) you made this year to improve or contribute to your sourcing needs. Did they pay off? What further changes and investments can you make to get even more out of your China sourcing program? Make a determination about what was worth the investment, get rid of dead weight and move forward with proven practices.
With just a couple of weeks left in 2015, I hope you will find these five easy steps useful. I hope they give you a vision and more control over your China sourcing program in 2016. I hope that this exercise will help you and your business expand and thrive!
By Jocelyn Trigueros