Sourcing and the Senior Executive
- Since 1990, Steve Anderson has been adding Made in China precision machined components and assemblies to his satchel of high quality sourcing case studies. A die hard engineer, he knows what to look for and how to get measurable results.
My name is Steve Anderson. My company is Global Development Solutions Corporation, and I founded the company roughly 9 years ago after a 32-year career with an international firm, by which time I was manager of global sourcing with that firm.
What kind of products does GDS work with?
GDS doesn't do any work in household good, or retail, anything like that, or consumer goods. We don’t do any work in medical devices, pharmaceuticals, or aviation. We’ve done a lot of work with automotive, some electronics, some – let’s call them “over the counter pharmaceuticals,” but they’re animal veterinary products. We’ve done work with machine castings, fully assembled parts, valves, pressure vessels, hydraulics, automotive, marine electronics, some sporting goods, but that comes back more in the retail side. But almost anything industrial we’re very comfortable with.
What's the hardest thing about your business?
I would say the most difficult part about this business in on the buyer’s side. Often I’ve been a keynote speaker on this subject and I will point out that for me it’s not difficult to find the right suppliers in China and bring them on stream. But the single biggest obstacle, and the most difficult part, is with the buyer. And the reason it’s with the buyer – numerous reasons – lack of interest, lack of budgeting, conflict of resources, and so forth. Probably you can best appreciate the model story if I tell you briefly about the opposite of a model story. Opposite of a model story – I’ve had it happen on several occasions – where it has taken at least two years to bring a product on stream. Why does it take two years? It takes two years because it took the buyer two years to fix their drawings, change their designs, and all the delays are on the buyer’s side.
To finish up though, on a happy note, we work with a small Midwestern firm, probably a $3M firm, 25 people. And we were in and out of that firm in about 6 months and put in a program that saves them 10% of sales with no capital investment. Why was that a success story? They had good documentation, they were decisive. And it was so simple. We had the right supplier with the right mindset, and we had the right buyer with similar goals. And everything went quickly.
How exactly does GDS work with your clients?
Very briefly let me tell you what we do from the beginning, the middle, and the end. In the beginning, we will spend time with the client’s purchasing database and look at what they buy and what they make. Particularly in where is the spend on what they buy from other people. And we’ll look at off of that and sort it based on decreasing dollars. Probably a simple export into Excel or something like that. We’ll look at the cost structure of those materials, and then we’ll spend a lot of time in the shop looking at, walking around, picking things up and so forth. Eventually we’ll develop a sequence of what we should buy in China. This is the sequence in which we should buy it. And we do it in a way so that the early items are those that generate cash the fastest. Why do we do that? Because, obviously, I need to get paid for that and if we can identify the low-hanging fruit and easy pickings first, and start saving money right away, then the entire project becomes self-funded.
It’s important that we find the right match between the buyer and the supplier, and that match needs to be the correct one going both ways. Usually what we will do is I will work with our clients to write a supplier profile, and we will define how big the supplier should be, how big or how small, perhaps where they’re located geographically, their ownership structure, what kind of products they make now, and probably who their customer base is. So we’ll do a lot of that to kind of predefine what kind of supplier that we’re looking for. And then if necessary we will do a search. We’ll do a search in my firm’s name and it will be a blind search so that our client’s name is not spread all over China. In the end, the client’s name will be revealed to maybe the two finalists, or three finalists.
Find out more about Steve Anderson and Global Development Solutions here.