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CHINA SOURCING GROUP: DELIVERING ON
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In 2004, US-based China Sourcing Group, which specialised in premium and gift products,
established a sourcing office in Shanghai. The Shanghai office was responsible for sourcing
vendors in China and southern Asia. It played a major role in quadrupling China Sourcing
Group’s revenues over the next four years. Despite its contribution to the Group, the Shanghai
office was plagued by frequent late deliveries, especially for new products that required
development from scratch. In 2009, the Shanghai management team decided that something
had to be done to improve the punctuality of its deliveries.
China Sourcing Group USA
Company Overview
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Established in New York in 1912, China Sourcing Group was an international company that
specialised in premium and gift products. The Group was comprised of four divisions,
including China Sourcing Fabrics. Headquartered in the United States, China Sourcing Group
was an importer of beads, stationery, bridal products, wearables, ribbons, activity toys and
related accessories. Its customers consisted mostly of chain stores such as Wal-Mart, Target,
Michaels, Kmart and Toys“R”Us.
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In 2004, China Sourcing Group set up an office with six staff in Shanghai. The office handled
a range of responsibilities, including procurement, product development, vendor auditing,
supplier management, quality control and shipping. By 2008, the Shanghai office had grown
to more than 100 staff, excluding quality-control staffs who were stationed at vendors’ plants.
The Shanghai office sourced not only from China but also other southeastern Asian countries.
The establishment of the Shanghai office played a major role in China Sourcing Group’s
increase in sales revenue from US$40 million to US$180 million between 2004 and 2008 [see
Exhibit 1].
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