Martin Brooke was born in Manchester England and is married with one daughter. He has held senior management positions in the fastener /tooling industry for over 20 years within Forbes 100 organizations such as Black and Decker and Anixter. His background is in mechanical engineering applied in fastener manufacturing and global component distribution. He is a Global Sourcing and Quality specialist with international experience including USA, Europe, Central Europe, Taiwan, China and India. Martin is the founder of Direct Supply Management Inc. a US corporation operating close to Detroit and Beijing, dedicated to providing truly independent sourcing consultancy services.

Martin can be contacted at martin@directsupplymanagement.com

Tell us in a few sentences about your company, who are your clients, what is your mission, what problems do you resolve?
Direct Supply Management has offices in Detroit, Michigan and representation close to Beijing China.  We offer full service strategic sourcing and supplier management on a consultancy basis for US and European Industrial Hardware, Fastener and Tooling manufacturing and distributors, but we are equally capable of  linking any client with a suppliers of any engineered small components. In a nutshell we represent the small the mid size businesses, who may not have their own internal resources, connect with the very best suppliers and take the pain out of outsourcing. This in turn provides them a competitive edge by lowing the overall COGS, not just price.

These are the elements we provide to answer the needs of our clients:

• Joint development of your Global Strategic Sourcing Plan.
• Pre-qualification and on-site supplier audit by qualified Lead Assessor.
• Sourcing and quotation process.
• Price and contract negotiation.
• Project management and Product QC.
• Ongoing Supplier Development for long term sustainable partnerships.
• Coaching your team to effectively manage direct supply.

Why does the business partnership with China interest you (your company)? Is this a genuine interest to work with Chinese businesses?

I have personally been coming to China for around 10 years. I never cease to be amazed by the rate of development here. So I have absorbed myself in the people, culture and business methods. China has taken her place among the great industrial giants and it set to overtake many of them. There is potential to purchase goods and services but also there is a huge untapped domestic market in which to sell products. But I would only advise a client to come to China if there is proof that the best value package is available. My job is to seek out the country, product and manufacturing process delivering the best value, wherever in the world they happens to be.

From your point of view, how special is doing business with China (shipment of goods, logistics, quality control of the production etc)?

I believe China has already become an economic force to be reckoned with and the message is clearly “ ignore her at your peril”. The infrastructure in China is generally very good so logistics is not usually an issue, technical expertise is usually available because China has invested heavily in education for engineering and other industrial skills. This has happened at the same time as the west has to a large extent divested in industrial skills. The range of what is available is huge, good and bad, so it becomes a mammoth task for someone new to China to navigate to find a good partner.

What business prospects with China do you see on the whole for your company?

China is still a LLC supplier in my industry for higher volume standard product. So it is still a potential source for DSM, for certain commodity products. However, government policy, higher costs and western anti-dumping penalties have eroded the attractiveness on some products. I also see the future in the Chinese domestic aerospace market for exporting high end products from USA and Europe to satisfy the growing need in Chinese passenger jet aircraft projects.

How do you assess the current state of being and the level of knowledge according to the different aspects of  a vision of business with China? How important and necessary is it for your and for your company? What do you think would your customers say on this question? What do your customers think about  “Made-in-China” goods?

To be honest I think many people would like to see more goods made in their own country and feel that there is an unfair advantage held by some of the lower cost countries like China. But if they think like this they are missing out on the many benefits of a global economy.  Businesses in USA or Europe both have a set of core competences which they should continue to keep in-house. The secret is to blend this with product and services which are created in the best locations around the world.  China is a very important provider within this global strategy.

Business education, variable seminars, courses and trainings are extremely popular nowadays. To what extent should the specific aspects of doing business with China be studied by the managers?

I feel a basic understanding of social history, business culture and etiquette are essential and vastly underrated particularly by western industry. I would add to this “appropriate communication” rather than language. I see the importance of proper communication to be far more important than the mere understanding of written or spoken language.  I believe the lack of attention in these areas are major contributing factors for why  businesses sometimes  fail to build viable relationships in China. I would temper this by pointing out that there are a lot of training companies who make this leaning involved and expensive and may they not have the personal experience to draw from. Choose training (I prefer to say coaching) wisely from someone with grass roots experience.  Remember, there is no substitute for involving yourself in the experience even if you make a few errors at first. The other life rule I try to follow is “respect people and you will gain respect in return”.

Is the level of quality of staff within a Chinese business an important factor when building the relations with China? Is it enough to manage with the only representative or intermediary who specialize in making business with China?

This is a very good question. Each Chinese business also goes through an evolution in there understand of what it means to do business with western customers. To grow their export sales they know to employ customer facing people with language skills of the target country. But for the same reasons as we just talked about, this is often not enough. For example a Chinese supplier hoping to attract my attention recently sent me an email titled “SPAM”. For these reasons, I tend to steer any newcomer to China, to suppliers with some export experience, where the customer service staff have a good understanding of customers expectations.

If you are purely purchasing products, it makes a lot of sense to use the services of an organization who have experience and presence in China. They will be able to help the buyer  through the initial relationship building/order phase. Our objective is always to bring the buyer organization up to speed very quickly so that they can deal direct with the supplier/partner without an intermediary.

If you desire to sell products in to the Chinese market then it becomes more important  to have your own representative, or better still, presence in China. Perhaps this could be with some assistance from a professional supply management consultant to help set this up.

What do you think will help to minimize the various risks arising when doing business with the Chinese companies? The CEO of the company and the majority of the managers do not possess the required amount of the special knowledge on this problem. How can they solve the problem of communication with the Chinese business?

This is a big question, but I will try to touch on some important points. If you are brave enough  to do it yourself, you will need to follow some of the principles we have already talked about in this interview. This includes having a clear strategy of what and where. If you are manufacturing products, don’t believe what you see in emails and websites until you have visited the actual factory and seen the process in operation or better still, take notice of the quality of what is produced.  Make sure the supplier is the best fit to provide what you need (capability and capacity), and has appropriate experience of exporting similar products. Seek referrals or ask for a customer list and verify a couple of customers.  There is no need to compromise, there will be a supplier out there to meet your every requirement, just need to find them. Spend time getting to know your new partner long before placing any orders. Establishing clear lines of communication may save you from getting in to problems downstream. Remember that relationships are built over a cup of tea or at the dinner table and rarely just in emails. The rest is about clearly defining requirements with drawings, simple guidelines and, better still, samples or photographs.  Inspect and approve samples before committing to production, but still don’t assume anything. Continue to inspect until confidence builds.