It may prove challenging to navigate the continually changing sourcing landscape. In this podcast, we explore The New Sourcing Landscape of 2023 and look more closely at how the situation has altered over the past year and what you need to do to move forward in 2023. We were pleased to participate in Global Sources' "Buyer Fire Side Chat" event.
Moreover, learn more about what you should do right away to adapt to the changing sourcing environment. Tom McGrenery from Global Sources and David Hoffmann from GlobalTQM will be the guest speaker.
Global Sources is best recognized for its multichannel B2B marketplace, sourcing platform, and trade exhibitions.
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PPodcast Transcripts
Tom McGrenery 0:21
Now we're joined by another expert guest, David Hoffmann from globaltqm.com. And let's see if we can get David up on the screen there is Hey, hello, David. Good morning. I'm not sure is it the morning where you,
David Hoffmann 0:35
Tom, it's, it's late mid afternoon. For me. It's about 2:30pm. Yeah,
Tom McGrenery 0:42
not too uncivilised an hour, then I've got to thank you for thank you for joining us anyway. So first off, what can you tell our viewers a bit about yourself and your company? Like what what is globaltqm.com? And what does it do? Or what happens? Yeah,
David Hoffmann 0:57
sure. Sure, Tom. So just a bit of background, I've been, I was living in Hong Kong in China for the last 19 years. I recently left and relocated to Australia, our offices are in Shenzen, what we do is we help people source and develop products. So the whole idea is, you know, a lot of people kind of have their own team on the ground in China, or don't have that experience and expertise in dealing with Chinese manufacturers, or they struggle with technical issues, quality issues, compliance issues, or just communications. So we basically give people a team on the ground and help them handle a lot of the legwork. For them on the ground. I think one of our core differences to buying agents or things like that is that we help the people find the manufacturers and build their own direct relationship with the manufacturers, which is really something we believe strongly in.
Tom McGrenery 1:55
Alright, awesome. And so someone can kind of come to you and say, you know, I want to get hold of this kind of product or have this kind of thing made and and you're sort of take, you're able to take it from something as basic as that and kind of fill in the gaps. 100%,
David Hoffmann 2:06
some people have got a general idea. Some people want to enter a new industry, and certainly manufacturers in the space, but we need to do all the homework and groundwork to see if it's feasible. Others know exactly the product idea they have in mind, and they want to find a Chinese manufacturer, and they really want to just short cut that whole learning curve, and you know, somebody trusted on the ground that can help them with that.
Tom McGrenery 2:30
Fantastic. So you're the perfect person to ask about this kind of thing. Let's start with the recent past. I guess the headline news in terms of what's been happening over the past year or so is fairly well known. But, you know, what are some of the maybe the sourcing and production related events that you know, you've seen unfolding in China and connected places that maybe you maybe people don't know about already?
David Hoffmann 2:56
Well, it's really interesting, I get asked this a lot. And, you know, I think what we find, you know, throughout COVID, it became increasingly difficult to get supply out of China, not just China to be feared, in many places, it became harder to get supply out of, and production lead time just became a lot longer is, you know, shipping costs, freight costs, or just went exponentially high. If you could even get space and availability. You know, without being able to travel to trade shows. It had its share of problems. I guess, it just made people have to learn to work online, and build much better relationships with suppliers, you know, yet to stop relying and depending on them, which sometimes quite a scary challenge for people. But yeah.
Tom McGrenery 3:51
All right, and how do you see the sourcing landscape shaping up for this year, I guess, the Year of the Rabbit, so we just entered? Like, what are some of the maybe the continuing trends or any kind of things that are going to change quite soon that you think are important to know about or important to react to?
David Hoffmann 4:09
Well, I think the probably one of the biggest things right now is obviously with China and opening up people who have to travel. I think that, you know, there's going to be this huge influx already we feeling with people coming to China wanting to see their manufacturers face to face trade shows, which is a huge, you know, I'm a I'm a big supporter of trade shows, and I think people will be able to finally come to trade shows and do that face to face business. I think there's going to be a game changer. I think one of the what I think is a misnomer is a lot of people asked me Oh, should I be sourcing products outside of China now and moving to other countries like Vietnam, India. And you know, the short answer is I think it depends a lot on the size of the company. You know, there's a lot of small sellers on Amazon On all sport ecommerce stores that don't really have the volume or the scale to go and diversify their whole supply chain. So I think there's still a huge reliance on China. I think it's really a bit of a misnomer. I think some of the big manufacturers of the world's the apples, the Samsung's, you know, yes, they spread out there supply chain risk, but I think people kind of get confused about at what level you want to go about those things.
Tom McGrenery 5:25
Yeah, that's right. If you can, if you can just go and buy a factory in Vietnam or something like that you're sort of operating in a different playing a different game, I suppose. To the smaller buyers. Yeah. As
David Hoffmann 5:38
magically. Yes, sorry, go ahead.
Tom McGrenery 5:41
And it seems ironic that in some ways, the big changes, especially for for China, for this coming year, are that things are getting back to like, they used to be in the old days, you know, with, like, you know, ships, leaving harbours, and being able to travel to inspect factories, or go to trade shows. So, please go on.
David Hoffmann 6:00
Now, what I was gonna say is, is even just one thing is moving the factory. The other thing is, it's just that expertise of the local people that work in the factories and the training. Now, that takes years. And I actually think there's a lot more opportunity now in China, because I'm, you know, COVID with with it, for the better or for worse, I think a lot of you know, the poor manufacturers struggled have closed down, I think the gods have survived are probably in a really much better, strongest situation. Now, it's actually serve as customers, you know, everyone's here to innovate and learn.
Tom McGrenery 6:36
She'll think, yeah, I mean, basically, based on that, though, we've got this reopening of, of Chinese manufacturing, becoming more available, these presumably leaner, meaner operations that have survived through these, you know, last last couple, three years, I suppose. What should you be doing, if you're a buyer to respond to that right now? You know, what should you be doing right now? Or I guess, what should you be planning to do in the coming months to, you know, take advantage of that as things? As things develop?
David Hoffmann 7:12
Yeah, that's a good question. So I think a few things, I think, number one, you should hop on a plane and go visit your suppliers and just really solidify that relationship. be hands on with them to see when new opportunities, I think that's a real lost opportunity. And I think that'll serve well. I also think that, you know, through this, people have learned what it's like to cope with business, when you can't get supply, and you've got delayed shipments. So I think, you know, take this opportunity now to learn from that. And, you know, be super proactive, you know, order in advance, make sure you got enough inventory. Don't wait to the last minute, you know, and just be really super proactive. You know, some people are so into recession. But I still think, you know, if you've got inventory to sell, you know, you'll sell it if you don't have inventory, you'll never do any revenue.
Tom McGrenery 8:06
Yeah, I think we've all we've all learned the lesson that plan based on as long as everything goes fine, it'll be fine isn't isn't necessarily the best idea. As Yeah, I mean, as we just I mean, the thing is, I think, theoretically, everybody knew that before, but it took took a big demonstration to sort of wean ourselves away. And of course, in just in time fulfilment, is still gonna have a place. Right, but I suppose a backup plan,
David Hoffmann 8:34
either backup plan, and you know, there really is, I think what people sometimes miss sight of, is that just like, we're looking for the best manufacturers, the best manufacturers are looking for the best customers too. So, you know, that's why I say, you know, take that time to to work with them, build that relationship support them. Because, you know, when you need supplier, you know, I've got a lot of friends in the industry, that they can't ship enough containers that they just can't they supply the quantity look, I'm going to allocate X amount to my top 10 customers, just because I want to take care of all of them. So, you know, it's not just that I'm a customer, I should get what I want situation anymore.
Tom McGrenery 9:14
Yes. Right. I mean, when we talk to suppliers, they often they often do make the point that yeah, when you're, when you're interviewing and vetting them, they're doing the same, right back to you. And you're looking up your website, they're sort of finding out about you. And when they meet you, that's, that's that's important, too, you know? Yeah, I mean,
David Hoffmann 9:30
I get that all the time from people who know the supplies are coming back to me or they're stopped responding. And, you know, the first thing to say is like, for me all the correspondence and then after a while you start reading, like, you know, how busy they are. Do you have any customers? I've got, like asking all these annoying questions as well. You know, sometimes you have to just kind of step it up and make him want to work with you and, you know, own some of the responsibility. Yeah,
Tom McGrenery 9:53
I mean, and on that subject of like flying over and, you know, meeting up, I mean, would you recommend doing that is it worth doing even if you Don't just like have a particular thing to ask them about, you know, you're not looking for a new product, you just want more of the old stuff. Is it still? Is it still worth kind of going to meet? Suppose just to say hi, essentially? Or do you need kind of, you know, what's the threshold for it being? Well,
David Hoffmann 10:15
I, I can tell you, Tom, in my last 25-30 years sourcing products in China, there's never been a face to face meeting where something interesting has not come out of their conversation just by being in person, whether it's whether they've got a new idea when the good discussion, something comes up, it's always worth it.
Tom McGrenery 10:36
All right, fantastic. And in terms of what actually do, although we're saying Go meet face to face, in terms of online sort of sourcing or communicating without without being present, like what's your what's the best practice now for like deciding when to, for example, do a zoom meeting, instead of an email during a call that kind of thing? Would you say?
David Hoffmann 10:59
Yeah, I try to encourage people to hop on a Zoom meeting as soon as possible, rather than waiting. I think that communication interaction with people face to face makes a real difference. I also encourage people to, you know, try and get a tour of the factory or some photos from the factory, and some background information on like, just background information, how long they've been open, but actual real pictures of their production line and the facilities, even if they do a video call walkthrough. I think that just tells 1000 things. And then the follow up by email can be it's just normally a lot faster and smoother. Presumably, people are using WeChat, because that's the word.
Tom McGrenery 11:45
You use WeChat? A few. If you
David Hoffmann 11:47
want to master WeChat. To your productivity levels or clinics.
Tom McGrenery 11:51
Yeah, yeah, you raise a really great point as well, actually, if when you ask people to sort of send photos or videos, or do it yet do a kind of live call to show where they work. A lot of the time people are people are very happy that you're interested, like, let alone because they're proving that their factory is of a given capacity. People often, you know, especially manufacturers are quite delighted that you're interested in like how they I don't know, you know, stamp a particular part to put into a motorbike or whatever it is. Yeah. And
David Hoffmann 12:21
you're right. Yeah, you're actually spot on. And like, I find people say to me, often, Oh, can you send people to the factory in Germany audits and check them out? And always go, I can, of course, you know, that cost money. But I said, Did you know that like, if you spoke to them in a bus, you could probably get 80% of that done with the right questions, because like you said, Tom, when they're super passionate about their factory and the production line, they want to tell you about you. So how do you check this for quality? How do you check that quality? And that's why I say those conversations are really good, because you learn from them. And if you've got guys, you know, factories that are telling you all these answers with this passion you got off, they know their stuff, if you've got cargo? Oh, I don't know, I'll check. I'll come back to you. You start thinking?
Tom McGrenery 13:06
Yes. A bit of a warning? Well, might not always be a warning sign. It might be you're just talking to the sales guy. He genuinely doesn't know that.
David Hoffmann 13:14
Correct? Correct. And that's why, you know, is a process you know?
Tom McGrenery 13:20
Well, that's fantastic. Those are some some great advice and a relatively sunny outlook for China sourcing by the sounds of it. Do you think it's going to be kind of I mean, what's the overall outlook for exports from from China in this this year? Is it sort of back to or even kind of exceeding the previous levels of growth? Are we kind of looking at a maybe a more modest, chugging along? kind of situation?
David Hoffmann 13:46
It's a bit hard to say, now, you know, a lot of people are predicting a recession. So some people might be scared on inventory. A lot of the people I know are stocking up as much as they can. Because they just said, even if I don't sell it all this year, that next year, we have such supply constraints. But you know, it does depend on your situation. I'm personally quite optimistic. You know, I don't there's a lot of production in China, I don't see how it can be moved. I think there's a lot more online resellers now that are doing exceptionally well. I think it'll I think it's going to be positive.
Tom McGrenery 14:25
Fantastic. Okay, David. Now, if the viewers would like to get in touch with you and ask about your services, or either just just chat, how to how did they do that?
David Hoffmann 14:33
Yes, super easy. Just go to our website, it's global tqm.com. Or they can email support a global TQM. But on our website, there's a schedule discovery call. And they can let us click that we do a free call, they can check to me. They don't have to buy any services, happy to just talk through their projects, their problems. You know, we started this whole division of our business just to help set people that had small problems that we could help them solve. So you know, happy to talk to anyone.
Tom McGrenery 15:01
Excellent. Thanks very much for your time. Really appreciate it.
David Hoffmann 15:05
Awesome, Tom, thank you very much for having me.
Now we're joined by another expert guest, David Hoffmann from globaltqm.com. And let's see if we can get David up on the screen there is Hey, hello, David. Good morning. I'm not sure is it the morning where you,
David Hoffmann 0:35
Tom, it's, it's late mid afternoon. For me. It's about 2:30pm. Yeah,
Tom McGrenery 0:42
not too uncivilised an hour, then I've got to thank you for thank you for joining us anyway. So first off, what can you tell our viewers a bit about yourself and your company? Like what what is globaltqm.com? And what does it do? Or what happens? Yeah,
David Hoffmann 0:57
sure. Sure, Tom. So just a bit of background, I've been, I was living in Hong Kong in China for the last 19 years. I recently left and relocated to Australia, our offices are in Shenzen, what we do is we help people source and develop products. So the whole idea is, you know, a lot of people kind of have their own team on the ground in China, or don't have that experience and expertise in dealing with Chinese manufacturers, or they struggle with technical issues, quality issues, compliance issues, or just communications. So we basically give people a team on the ground and help them handle a lot of the legwork. For them on the ground. I think one of our core differences to buying agents or things like that is that we help the people find the manufacturers and build their own direct relationship with the manufacturers, which is really something we believe strongly in.
Tom McGrenery 1:55
Alright, awesome. And so someone can kind of come to you and say, you know, I want to get hold of this kind of product or have this kind of thing made and and you're sort of take, you're able to take it from something as basic as that and kind of fill in the gaps. 100%,
David Hoffmann 2:06
some people have got a general idea. Some people want to enter a new industry, and certainly manufacturers in the space, but we need to do all the homework and groundwork to see if it's feasible. Others know exactly the product idea they have in mind, and they want to find a Chinese manufacturer, and they really want to just short cut that whole learning curve, and you know, somebody trusted on the ground that can help them with that.
Tom McGrenery 2:30
Fantastic. So you're the perfect person to ask about this kind of thing. Let's start with the recent past. I guess the headline news in terms of what's been happening over the past year or so is fairly well known. But, you know, what are some of the maybe the sourcing and production related events that you know, you've seen unfolding in China and connected places that maybe you maybe people don't know about already?
David Hoffmann 2:56
Well, it's really interesting, I get asked this a lot. And, you know, I think what we find, you know, throughout COVID, it became increasingly difficult to get supply out of China, not just China to be feared, in many places, it became harder to get supply out of, and production lead time just became a lot longer is, you know, shipping costs, freight costs, or just went exponentially high. If you could even get space and availability. You know, without being able to travel to trade shows. It had its share of problems. I guess, it just made people have to learn to work online, and build much better relationships with suppliers, you know, yet to stop relying and depending on them, which sometimes quite a scary challenge for people. But yeah.
Tom McGrenery 3:51
All right, and how do you see the sourcing landscape shaping up for this year, I guess, the Year of the Rabbit, so we just entered? Like, what are some of the maybe the continuing trends or any kind of things that are going to change quite soon that you think are important to know about or important to react to?
David Hoffmann 4:09
Well, I think the probably one of the biggest things right now is obviously with China and opening up people who have to travel. I think that, you know, there's going to be this huge influx already we feeling with people coming to China wanting to see their manufacturers face to face trade shows, which is a huge, you know, I'm a I'm a big supporter of trade shows, and I think people will be able to finally come to trade shows and do that face to face business. I think there's going to be a game changer. I think one of the what I think is a misnomer is a lot of people asked me Oh, should I be sourcing products outside of China now and moving to other countries like Vietnam, India. And you know, the short answer is I think it depends a lot on the size of the company. You know, there's a lot of small sellers on Amazon On all sport ecommerce stores that don't really have the volume or the scale to go and diversify their whole supply chain. So I think there's still a huge reliance on China. I think it's really a bit of a misnomer. I think some of the big manufacturers of the world's the apples, the Samsung's, you know, yes, they spread out there supply chain risk, but I think people kind of get confused about at what level you want to go about those things.
Tom McGrenery 5:25
Yeah, that's right. If you can, if you can just go and buy a factory in Vietnam or something like that you're sort of operating in a different playing a different game, I suppose. To the smaller buyers. Yeah. As
David Hoffmann 5:38
magically. Yes, sorry, go ahead.
Tom McGrenery 5:41
And it seems ironic that in some ways, the big changes, especially for for China, for this coming year, are that things are getting back to like, they used to be in the old days, you know, with, like, you know, ships, leaving harbours, and being able to travel to inspect factories, or go to trade shows. So, please go on.
David Hoffmann 6:00
Now, what I was gonna say is, is even just one thing is moving the factory. The other thing is, it's just that expertise of the local people that work in the factories and the training. Now, that takes years. And I actually think there's a lot more opportunity now in China, because I'm, you know, COVID with with it, for the better or for worse, I think a lot of you know, the poor manufacturers struggled have closed down, I think the gods have survived are probably in a really much better, strongest situation. Now, it's actually serve as customers, you know, everyone's here to innovate and learn.
Tom McGrenery 6:36
She'll think, yeah, I mean, basically, based on that, though, we've got this reopening of, of Chinese manufacturing, becoming more available, these presumably leaner, meaner operations that have survived through these, you know, last last couple, three years, I suppose. What should you be doing, if you're a buyer to respond to that right now? You know, what should you be doing right now? Or I guess, what should you be planning to do in the coming months to, you know, take advantage of that as things? As things develop?
David Hoffmann 7:12
Yeah, that's a good question. So I think a few things, I think, number one, you should hop on a plane and go visit your suppliers and just really solidify that relationship. be hands on with them to see when new opportunities, I think that's a real lost opportunity. And I think that'll serve well. I also think that, you know, through this, people have learned what it's like to cope with business, when you can't get supply, and you've got delayed shipments. So I think, you know, take this opportunity now to learn from that. And, you know, be super proactive, you know, order in advance, make sure you got enough inventory. Don't wait to the last minute, you know, and just be really super proactive. You know, some people are so into recession. But I still think, you know, if you've got inventory to sell, you know, you'll sell it if you don't have inventory, you'll never do any revenue.
Tom McGrenery 8:06
Yeah, I think we've all we've all learned the lesson that plan based on as long as everything goes fine, it'll be fine isn't isn't necessarily the best idea. As Yeah, I mean, as we just I mean, the thing is, I think, theoretically, everybody knew that before, but it took took a big demonstration to sort of wean ourselves away. And of course, in just in time fulfilment, is still gonna have a place. Right, but I suppose a backup plan,
David Hoffmann 8:34
either backup plan, and you know, there really is, I think what people sometimes miss sight of, is that just like, we're looking for the best manufacturers, the best manufacturers are looking for the best customers too. So, you know, that's why I say, you know, take that time to to work with them, build that relationship support them. Because, you know, when you need supplier, you know, I've got a lot of friends in the industry, that they can't ship enough containers that they just can't they supply the quantity look, I'm going to allocate X amount to my top 10 customers, just because I want to take care of all of them. So, you know, it's not just that I'm a customer, I should get what I want situation anymore.
Tom McGrenery 9:14
Yes. Right. I mean, when we talk to suppliers, they often they often do make the point that yeah, when you're, when you're interviewing and vetting them, they're doing the same, right back to you. And you're looking up your website, they're sort of finding out about you. And when they meet you, that's, that's that's important, too, you know? Yeah, I mean,
David Hoffmann 9:30
I get that all the time from people who know the supplies are coming back to me or they're stopped responding. And, you know, the first thing to say is like, for me all the correspondence and then after a while you start reading, like, you know, how busy they are. Do you have any customers? I've got, like asking all these annoying questions as well. You know, sometimes you have to just kind of step it up and make him want to work with you and, you know, own some of the responsibility. Yeah,
Tom McGrenery 9:53
I mean, and on that subject of like flying over and, you know, meeting up, I mean, would you recommend doing that is it worth doing even if you Don't just like have a particular thing to ask them about, you know, you're not looking for a new product, you just want more of the old stuff. Is it still? Is it still worth kind of going to meet? Suppose just to say hi, essentially? Or do you need kind of, you know, what's the threshold for it being? Well,
David Hoffmann 10:15
I, I can tell you, Tom, in my last 25-30 years sourcing products in China, there's never been a face to face meeting where something interesting has not come out of their conversation just by being in person, whether it's whether they've got a new idea when the good discussion, something comes up, it's always worth it.
Tom McGrenery 10:36
All right, fantastic. And in terms of what actually do, although we're saying Go meet face to face, in terms of online sort of sourcing or communicating without without being present, like what's your what's the best practice now for like deciding when to, for example, do a zoom meeting, instead of an email during a call that kind of thing? Would you say?
David Hoffmann 10:59
Yeah, I try to encourage people to hop on a Zoom meeting as soon as possible, rather than waiting. I think that communication interaction with people face to face makes a real difference. I also encourage people to, you know, try and get a tour of the factory or some photos from the factory, and some background information on like, just background information, how long they've been open, but actual real pictures of their production line and the facilities, even if they do a video call walkthrough. I think that just tells 1000 things. And then the follow up by email can be it's just normally a lot faster and smoother. Presumably, people are using WeChat, because that's the word.
Tom McGrenery 11:45
You use WeChat? A few. If you
David Hoffmann 11:47
want to master WeChat. To your productivity levels or clinics.
Tom McGrenery 11:51
Yeah, yeah, you raise a really great point as well, actually, if when you ask people to sort of send photos or videos, or do it yet do a kind of live call to show where they work. A lot of the time people are people are very happy that you're interested, like, let alone because they're proving that their factory is of a given capacity. People often, you know, especially manufacturers are quite delighted that you're interested in like how they I don't know, you know, stamp a particular part to put into a motorbike or whatever it is. Yeah. And
David Hoffmann 12:21
you're right. Yeah, you're actually spot on. And like, I find people say to me, often, Oh, can you send people to the factory in Germany audits and check them out? And always go, I can, of course, you know, that cost money. But I said, Did you know that like, if you spoke to them in a bus, you could probably get 80% of that done with the right questions, because like you said, Tom, when they're super passionate about their factory and the production line, they want to tell you about you. So how do you check this for quality? How do you check that quality? And that's why I say those conversations are really good, because you learn from them. And if you've got guys, you know, factories that are telling you all these answers with this passion you got off, they know their stuff, if you've got cargo? Oh, I don't know, I'll check. I'll come back to you. You start thinking?
Tom McGrenery 13:06
Yes. A bit of a warning? Well, might not always be a warning sign. It might be you're just talking to the sales guy. He genuinely doesn't know that.
David Hoffmann 13:14
Correct? Correct. And that's why, you know, is a process you know?
Tom McGrenery 13:20
Well, that's fantastic. Those are some some great advice and a relatively sunny outlook for China sourcing by the sounds of it. Do you think it's going to be kind of I mean, what's the overall outlook for exports from from China in this this year? Is it sort of back to or even kind of exceeding the previous levels of growth? Are we kind of looking at a maybe a more modest, chugging along? kind of situation?
David Hoffmann 13:46
It's a bit hard to say, now, you know, a lot of people are predicting a recession. So some people might be scared on inventory. A lot of the people I know are stocking up as much as they can. Because they just said, even if I don't sell it all this year, that next year, we have such supply constraints. But you know, it does depend on your situation. I'm personally quite optimistic. You know, I don't there's a lot of production in China, I don't see how it can be moved. I think there's a lot more online resellers now that are doing exceptionally well. I think it'll I think it's going to be positive.
Tom McGrenery 14:25
Fantastic. Okay, David. Now, if the viewers would like to get in touch with you and ask about your services, or either just just chat, how to how did they do that?
David Hoffmann 14:33
Yes, super easy. Just go to our website, it's global tqm.com. Or they can email support a global TQM. But on our website, there's a schedule discovery call. And they can let us click that we do a free call, they can check to me. They don't have to buy any services, happy to just talk through their projects, their problems. You know, we started this whole division of our business just to help set people that had small problems that we could help them solve. So you know, happy to talk to anyone.
Tom McGrenery 15:01
Excellent. Thanks very much for your time. Really appreciate it.
David Hoffmann 15:05
Awesome, Tom, thank you very much for having me.