The Sourcing Strategy Research Of PCB Localization In China For H Company

The global multinational companies invested in China have been activelyimplementing the China localization strategy with all means due to the increasinglycompetitive environment. The localization strategy is very helpful to improve the corecompetency of these companies and moreover it is good to build the smooth relationshipwith China local governments. With the successful localization strategy implemented themultinational companies can utilize the China’s technology, capital, and human resourceand raw material supplies. Based on the multinational company’s huge and strongeconomic scale and using the perfect consolidation of global resources they are expectingto stretch the most possibilities of maximizing profited margin.Obviously the China localization strategy is one of the parts of their whole packagestrategy globally. The localization strategy in China will play more and more importantrole as the increasing China international economic position.Strategic sourcing is absolutely very important for companies to achieve the perfectmanagement performance of their supply chain. There would be no supply chaincompetitive edges without good sourcing strategy. Generally, strategic sourcing wouldconsist of below items:[1]1. Rationalizations of supplier quantities to consolidate the spending. The moreconsolidation of spending is helpful to get lower purchasing costs or lower TCO;2. Global sourcing strategy;3. Low cost region/country sourcing. Fully utilize the low costs of human resources;4. E-sourcing/internet purchase;5. Components standardizations and simplification of specifications are able toreduce the components quantities, and to increase the unit item purchasing volumes. Itwould be easier to manage and negotiate for better costs;Generally, Printed Circuit Board is the electrical mechanical base of all the electroniccomponents mounted. For the related electronic products manufacturers, Printed CircuitBoard is one of the critical purchased commodities with huge spend, usually the spends of PCB would be about7%of their total BOM costs. There are more than50%PrintedCircuit Board suppliers located in China including Taiwan and Hong Kong. So the wholesupply chain effectiveness of electronic companies will very much depended on thesuccessful Printed Circuit Board sourcing strategy in China. It is very necessary toresearch the China Printed Circuit Board suppliers in order to set up the successful globalPrinted Circuit Board sourcing strategy. This article focuses on the PCB Chinalocalization sourcing strategy.Rogers, Stephen C[2]believes purchase strategy is the similar as the corporatestrategic planning. The target of sourcing strategy is to support corporations to reachcompetitive strength and help corporations to win the market share.This article uses the PEST model, five force models, IEF and EEF evaluation matrixand supply china theories to analyze the H company supply chain of PCB based on Hcompany supply chain data to find out the critical success factors of PCB sourcingstrategy. The China localization strategy of PCB is set up after the deep analysis ofcurrent issues and challenges. Also the implementation planning is offered in the articleand the performance of sourcing strategy is evaluated correctly.