Any companies implementing a global sourcing strategy would do well to take the time to read a new report by The Boston Consulting Group (BCG). And according the study “Sourcing from China: Lessons from the Leaders”, the challenges posed by the Chinese market are greater than ever, requiring companies to “continually renew themselves” to overcome them.

Primary among them are internal resistance, lack of incentives for sourcing success, and perceptions of risks, leading the co-author of the report, Jim Hemerling to conclude: “Without top management support and drive to remove roadblocks, it is difficult to drive changes internally.”

The report found that the most important differentiating factors were the development of a clear strategy, incorporating specific targets and plans – according to study, despite 87 percent of companies having sourcing targets, whilst only a third have translated these into specific action plans; an ability to gain 100 percent transparency into sourcing volumes and savings; and the integration of China suppliers and R&D into design. The study’s findings also suggest that the top companies are outperforming their peers in risk management – both real and perceived – in areas such as exchange rates, labour and material cost fluctuations and problems with quality and transportation. In addition the report identifies that, increasingly, companies are consolidating their local and global China sourcing activities in order strengthen their negotiating position with suppliers, with almost two-thirds (64%) of respondents merging the two functions under one organisation.

When it comes to sourcing from China, it seems, the gap between the best and the rest, is as wide as ever, but there has never been a better, or more important, time to play catch-up.