China’s Role in Purchasing Chain

In current world market, "Made-in-China" often meansgood price and competitive quality. In terms of China'strade pattern, more than half of Chinese exporting productsbelong to processing trade industry according to the demandsand requirements of international orders. On the purchasingchain, China is learning from its international partners. Safetyand quality always tops all issues.

International giants control

Raw materials provided to international enterprises,such as retail giants Wal-Mart and Carrefour, fast-food tycoons KFC, McDonald and PizzaHut, have all been localized.Each company has itssuppliers and a completesystematic supply-chainin Mainland China, whichis a great promise to thepublic and customers.Though each internationalgiant have sets of strictstandards and regulations,Chinese suppliers can meetthem all well.

Let's see what Chinese KFC behaves first. Its100% chicken material and 85% package material aredomestic provided under a global assessment system,"STARSYSTEM".

Another example is from Wal-Mart. A small town inChina veils Wal-Mart's cloth supplier, but every processingcycle in this cloth factory is supervised and assessed underWal-Mart's strict standard. Workers and stuff there evercomplained that "Making cloth for Wal-Mart is a toughtask. You have to work very carefully, because any flaw inthe product may make your work null".

The first McDonald was opened in 1990 in Shenzhen,but its suppliers entered China to establish its farmsand factories in 1983. Its vegetable planting, from seedselection, sowing, irrigation, to fertilization and animalbreeding and slaughter are detailed recorded andregulated according to its manual of supply chainmanagement. Every producing and processing step istrustable.

Chinese supply companies should make sure thattheir products in accordance with the purchasingrequirements. A standard tomake options, assessmentto raw materials has tobe regulated and requirea good record. Anyrelated activities such asinspections should fullysupport purchasingrequirement too. Strictflow diagrams includingproduct name, ingredients, wrap, manufacturing date, best before date and storage conditions are all following and meetinginternational standard.

Chinese government supervision

Chinese government attaches great importance toproduct quality and food safety. On July 25, the executive meeting of the StateCouncil deliberated and passed a draft special regulation on the supervision ofproduct and food safety and made the decision to set up a leading group of theState Council on product quality and food safety. The regulation sets out rules onthe supervision of food safety and product quality. Legal preparation has taken animportant step on the purchasing chain.

It regulates that inspection and quarantine authorities, as well as commercialand drug supervisors, should establish positive and

negative records for Chinese food exporters and make therecords publicized regularly; Local governments at countylevel and above are mainly responsible for the supervisionof food product safety; Exporters of food products whoprovide fake quality certificates or evade quality andquarantine inspections will be fined three times theproduct's value.

Latest performance

On August 25, Chinese government initiated thesupervision projects on China's home made products. Thisspecial regulation and rectification on national productquality and food safeguard would last for 4 months, fromlate August to the end of December.

The key points of the rectifications lie in three aspects:key products, key entities and key regions. Key productsrefer to edible agricultural products, food, drugs, consumerproducts. Key entities refer to vegetable production bases, large scale livestock,poultry and aquatic product farms, slaughterhouses, feed processing plants, foodproducing and processing enterprises and small workshops, agricultural sidelineproduct wholesale markets, fresh product supermarkets, small groceries, smallrestaurants, pharmaceutical industries and enterprises. Key regions refer to ruralareas and urban-rural fringes, food production intensive areas, areas with outstandingproblem of production without license, as well as areas with repetitious productionand sale of fake products. All those keys focused on high risk hazard area, so thatmore monitor and verification are required.

Through intensive rectifications on key products, key entities and key regions,a chain of supervision on the entire production process of industrial products allthrough the designing of products, the introduction of raw materials, manufacturingand processing, marketing and service shall be established and developed, soshall be a chain of supervision of the entire production process of food all throughcultivating and breeding, manufacturing and processing, distributing and marketing,and catering, as well as a trace back and accountability system of product quality andfood safety and a comprehensive quality monitoring network all over the society so asto raise China's product quality and food safety to a new level.

Purchasingchain is a criticalcircle in the wholeproducing process.China is makingall what it can doto meet the globalstandards and hasbeen admitted byinternational giants.Learning andgrowing as China'spurchasing chain isdoing right now, itstomorrow will surelybe better.