Real estate is about location, location and location. Same applies to international procurement offices (IPOs): the location has a big impact on people, taxation and logistics infrastructure that are critical to your IPO's success.
According to Ariba, approximately 48% of the word's largest corporations have established international
procurement offices (IPO). This figure is typically higher in industries with the
history of cost pressure, such as automobile, consumer goods and electronics. In the early days, many IPOs were set up to handle tactical things such purchasing order transactions. As supply base in low cost regions matures, more and more IPOs are commissioned with strategic tasks such as supplier identification, selection, audit and performance management. This requires a high level of expertise for the IPO staff. The people you hire for your IPO will make it or break it.
Our clients often ask, how much does it cost to hire a supply chain manager, logistics manager or purchasing manager in China? The answer, as expected, is it depends.
No matter which MNC office or subsidiary you visit in China, most likely you will notice a common phenomenon: local employees are much younger than their counterpart at headquarters. Most local hires are in their 20's, some 30's, and very few over 40's. Very unlikely you will see anybody over 50 except janitors and cleaners. There are multiple reasons.
A former CPO said, in order to manage China supply chains well, being bilingual is not enough; you have to be trilingual. We all know what bilingual means. So what is the third language?
We were helping a recent MBA graduate land a commodity manager job. His background is impeccable no matter what criteria you use: multiple years as the distribution manager for a Global 500 company, an expert in planning, logistics and warehousing, and MBA education from Arizona State University, a very top supply chain program in the nation. Furthermore, he is a rare trilingual candidate best suited for China supply chains: he speaks Chinese, English and the language of supply chain. This is evidenced by the interview opportunities he got: whenever companies came to campus, he was surely on the interview list. However, he seldom made the second round. Why?
Search firms are "head hunters." They get into the market, find the right target candidates, hunt them, and be done with it.
This is particularly true in today's China. Opportunities are abundant if you are a trilingual who speaks English, Chinese and the language of a profession, for example, supply chain management. Top candidates can get calls every week from head hunters offering a better paid position, not necessarily a better career. Young professionals change jobs as frequently as patroning restaurants. Very fast they end up with many great companies on their resume but are often lost in their career.
There got to be a better way to handle this.
