At NaviAsia, we leverage our experience in China to create value for our clients. Listed below is a diverse sample of the client work we have been involved in.
· Automotive
· Consumer Package Goods
· Electronics Printed Circuit Boards
· Food Service Supplies
· Office Supply Company
 Automotive
The Client
A mid-west based automotive component manufacturer with gross sales approaching $200 million. The company is the largest manufacturer of high tolerance critical engine components in the US, holding 70% of the market share in the US and 30% of the market share in Europe. Prior to working with NaviAsia, the client had not expanded into the Chinese market.
The Challenges
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The client supplies all major US original equipment manufacturers of light trucks, heavy duty trucks, and commercial vehicles, including Ford, GM and Chrysler. However, the client had been unable to acquire Toyota as a client and maintained no market presence in Asia. |
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The client had been receiving numerous unsolicited requests for sourcing from Chinese suppliers. The client was unsure how to approach the requests and needed assistance in assessing the capabilities and intent of the various suppliers. |
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The client wanted to break into the Chinese market due to its potential market size as well as establish a supply chain base to serve the entire Asian market. However, the client had no inroads or presence in China and needed guidance in developing the proper strategy and realizing the opportunity China presented. |
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Due to the highly automated nature of the manufacturing process for the engine components, the decision to source to China was not driven purely by low labor costs, but by the market potential of China and overall Asia. |
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The client turned to NaviAsia for assistance in creating a strategy for sourcing from China. Understanding the savings will not be as large as labor intensive manufacturing, NaviAsia helped the client in entering the China market, potentially the second largest auto market in the world. |
The NaviAsia Solution
NaviAsia worked with the client to find the optimal strategic sourcing and market entry solutions in China. The NaviAsia solution began with the traditional four phase process, but transitioned into the creation of a joint venture in China for the client:
Phase I: Supplier Survey
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NaviAsia associates in China surveyed the Chinese supply market to find suppliers capable of manufacturing high tolerance critical engine components. During this process over 100 suppliers were initially evaluated. The NaviAsia team found that the current market for engine component manufacturing was fragmented with no dominant players and six top players competing for a lead in market share. |
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The NaviAsia team examined each supplier to determine which suppliers were potentially capable of manufacturing at a sufficient level of efficiency and size of production. NaviAsia associates initiated requests for information (RFI) from 39 of the original 100 suppliers. |
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Using the information obtained from the top 39 suppliers NaviAsia worked with our client's executives to narrow down the choice to six top suppliers. |
Phase II: Supplier Operational Visit and Request for Quotation
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NaviAsia conducted onsite operational reviews of the top six suppliers in order to examine the facilities and validate their manufacturing capabilities. |
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As part of the Phase II process, the NaviAsia team also requested quotes from each of the top six suppliers. The NaviAsia team worked with the client and potential suppliers to validate the quotes for accuracy and cost competitiveness. |
Strategy Transition
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The NaviAsia team's examination of the suppliers' quotes and cost effectiveness confirmed that the cost advantage was not significant enough to continue with a traditional strategic sourcing to China. A successful sourcing to China usually provides a cost advantage of 30-40% of the piece price. |
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NaviAsia found that the savings were not that high from the Chinese suppliers due to the high equipment cost and the low labor cost involved in the manufacturing of the high tolerance, critical engine component. |
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Due to the lack of cost advantage, the NaviAsia team along with client executives, decided to investigate the possibility of creating a joint venture, alliance or partnership with one of the Chinese suppliers. |
Joint Venture Partner Search
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During the visiting process many suppliers had stated interest in being acquired or initiating a joint venture due to the client's global reach and reputation. Upon deciding on a joint venture as the next step, NaviAsia and the client reviewed the list of candidates and initial offers to determine which would potentially be the best and strongest joint venture partner. |
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The client and the NaviAsia team decided to select the largest manufacturer of this engine component in China as a joint venture partner. The company, located in the Henan Province, was selected due to its large market share and client list. The manufacturer held 12.5% of the market share, with a potential to reach 25% in five years, and maintained Toyota as a top client. |
Current Actions
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NaviAsia acted as the primary advisor through the lengthy joint venture negotiation, assessment and application process, assisting in numerous assessments and appraisals including the fair value assessment, third party appraisal and environmental assessment
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The NaviAsia team guided the client through the government required environmental impact assessment of the plant, ensuring the manufacturer to be abiding by the latest environmental regulations. |
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NaviAsia was also the essential advisor throughout the extended and complicated third party appraisal and assessment. The NaviAsia team worked to validate fair value as well as compose a list of the manufacturer's liabilities before entering into the lengthy negotiation process. |
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The client and the NaviAsia team are now in the process of completing the final necessary steps to start a joint venture with the Chinese manufacturer. In addition, the US and China NaviAsia team has been working on supporting the final negotiations as well as proper infrastructure identification and needs assessment combined with targeting and selecting key personnel. |
The Results
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The client will have a majority ownership in the engine component manufacturer with the possibility of eventual 100% ownership. |
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With NaviAsia assistance, the client now has a general manager as well as a CFO in place in China and is continuing to identify, evaluate and develop key personnel. |
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The client now has a significant portion of the Chinese engine component market as well as Toyota as a client; vastly improving the client's potential to increase its position in the Chinese market. The 2007 Toyota Camry in China now features components made by the manufacturer. |
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Consumer Packaged Goods
The Client
The client, a U.S.-based injection molding company, faced cost pressure and limited growth opportunity in North America. The company is interested in expanding its worldwide market share by leveraging the low cost structure in China.
The Challenges
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Before approaching NaviAsia, the client had used agents with limited success. |
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The client needed a strategy that focused on day-to-day implementation to ensure visibility and rigorous management |
The NaviAsia Solution
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Conducted the China supply market diagnostic and selected high-potential suppliers. |
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Evaluated each supplier’s management, manufacturing and financial capabilities from plant visits. |
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Designed the competitive playing field by managing the RFQ process with 15 suppliers to achieve the best pricing . |
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Orchestrated U.S. executive’s China plant visits, assisted in negotiation with top three candidates and finalized the supplier agreement . |
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Performed supplier management and development as client’s on-site team in China. Managed daily operation of mold design, new product development, prototyping, volume manufacturing and quality assurance . |
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Created and implemented intellectual property protection program . |
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Established, managed and optimized the integrated logistic management from China to U.S. |
The Results
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Procured quality products with average savings of 40%-60% . |
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Reduced new product development cycle time by 75% by leveraging suppliers & NaviAsia’s capabilities and resources . |
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Achieved an optimal end-to-end supply chain solution that met and exceeded client’s cost, quality, delivery and risk objectives. |
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Expect to form a joint venture with the suppliers as a platform to enter lucrative China market . |
^ TOP Electronics - Printed Circuit Boards
The Client
A U.S. electronics company based in the Midwest with gross sales approaching $500 million. Prior to partnering with NaviAsia, the company had had minimal international manufacturing and distribution experience. The client's supply and manufacturing bases at the time were located within a 1-hour drive from company headquarters.
The Challenges
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The client needed to increase profit margins and lower overhead in order to keep pace with the rest of the industry. Since the manufacture of electronics and printed circuit boards is such a highly mechanized process, the company had doubts as to whether it would be prudent to attempt a complete cost-structure overhaul by shifting manufacturing operations to China. That doubt, coupled with the conservative nature of the company, caused executives to proceed cautiously when mulling over a 10,000-mile addition to the existing supply chain. |
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There also appeared to be external hurdles to a trans-Pacific shift. Low production volume and high product diversity called for suppliers that were both flexible and readily adaptive. In addition, the highly sensitive nature of the field demanded the maximum level of intellectual property protection. |
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Seeking insight and expertise that was not possessed internally, the client approached NaviAsia about formulating a China sourcing strategy. |
The NaviAsia Solution
We responded by mobilizing both our U.S. and China offices in order to determine the manufacturers, suppliers, and intellectual property protection system that best fit our client's unique needs. As part of that process, we undertook the following operations:
Supplier Selection
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Conducting a China supply market diagnostic, we identified the most viable suppliers, focusing on cost structure, manufacturing versatility, size, and security. |
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Through multiple on-site plant visits, we evaluated the manufacturing capability as well as the level of commitment of each viable supplier. |
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We planned and orchestrated the China plant visits made by our client's executives, then assisted in negotiations with the top three candidates before finalizing an agreement. |
Supplier Management
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Acting as the client's on-site team in China, NaviAsia was in charge of overseeing daily operations such as new product development, prototyping, production, and quality assurance. |
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We created and implemented a secure intellectual property protection program, including a separate, on-site facility exclusive to our client. |
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We established, managed and optimized the client's integrated logistic management between China and the United States. |
Domestic Support
• At the organizational level, we were able to make lasting changes in perception that made expansion to China a less daunting and uncertain proposition for the entire company.
• We provided approach and implementation capabilities that were effective in obtaining real-dollar cost savings.
The Results
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The client received an average overall savings of 22-23 percent. |
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The client reduced its infrastructure costs by 10 percent, procurement costs by 10. |
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The client's intellectual property and proprietary rights were, and continue to be, heavily protected. |
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The client achieved an optimal end-to-end supply chain solution that met and exceeded its cost, quality, delivery and risk objectives. |
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After working with NaviAsia, a company executive said, “We didn’t think these types of margins were achievable when we first thought about extending into China. But we’ve gone well beyond our expectations; really the numbers are just out of this world.” |
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Food Service Supplies
The Client
A leading maker of consumer food-service products, based in the Midwest , with sales totaling approximately $95 million. The client is widely recognized throughout North America, and is one of the leading manufacturers in its field. Prior to partnering with NaviAsia, the client controlled a majority of the U.S. market share, but was looking to boost sales in China, where it had very little brand-name recognition.
The Challenges
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The client believed it was ready to enter the Asian market, and had targeted China as a potential base for Pacific operations. Unfortunately, the client was not certain how to expand, and was bereft of a management with any significant China experience. |
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The company also was unsure as to the size of the China market, and had little knowledge of Chinese customs or consumer habits. And though the client was interested in sourcing from China , potential manufacturers had not yet been identified. |
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The client approached NaviAsia with the hope of formulating a China sourcing strategy and planning for market-entry into the Asia-Pacific corridor.
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The NaviAsia Solution
We took a three-pronged approach in designing the client's market-entry and branding strategy:
Identifying Competitive Set
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Realizing there was no dominant player in the China market, NaviAsia identified the top three companies in terms of total sales. Together, these companies comprised approximately 20% of the category's sales in China . |
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Through visits to these three potential suppliers, we determined that only the top two met the client's standards for quality and manufacturing. |
Negotiations
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We drafted and helped negotiate a contract with the two top Chinese competitors, guaranteeing that our U.S. client would purchase 100 percent of the factories' product. The two former competitors became the client's de facto suppliers, retaining the equipment and staff they had been using. |
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By establishing an index-pricing model that guaranteed the new suppliers a fixed margin, NaviAsia presented the client with a contract that offered protection from market disruptions. |
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All parties agreed to share intellectual property and new product development, facilitating innovation and communication between China and North America. |
Branding and Marketing
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We undertook a comprehensive market-research assessment of 1000s of Chinese hotels, restaurants and catering services, and determined that the China market was indeed underserved in this particular category. |
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A survey of the market dictated that our client sell its product as the premier brand in China , the same image it has cultivated in the United States . The product's quality coupled with high demand from the market lead NaviAsia to suggest the client could and should command premium pricing. |
The Results
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The client made its initial foray into the lucrative China market. |
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The client essentially bought out its main competitors, and secured the rights to 100 percent of their product at a fixed margin. |
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With NaviAsia site-monitoring and employee-screening in place, the client's intellectual property was - and continues to be - protected. |
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The client achieved an optimal market-entry strategy that met and exceeded its cost, quality, delivery and risk objectives.
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Office Supply Company
The Client
A Midwest-based office supply company with gross sales approaching $100 million. While the company had previous long-term experience buying materials from China , the company had never expanded their manufacturing capabilities to China . Prior to working with NaviAsia, the company's manufacturing base was co-located with company headquarters in the US .
The Challenges
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The company's longtime clients began to demand significant cost reductions – roughly half of the current price. Clients such as Office Max, Staples and Sam's Club asserted that market competition from China had lowered the price to global competitive pricing. |
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The company, under cost pressure, quickly saw its margins erode as it tried to maintain a manufacturing base in the United States . |
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The company turned to NaviAsia for supply chain and sourcing assistance in transferring their manufacturing base to China in order to stay competitive in the US while maintaining and growing their customer base. |
The NaviAsia Solution
NaviAsia worked with the company to find the optimal strategic sourcing and supply chain solutions in China . The NaviAsia solution incorporated a four phase process:
Phase I: Supplier Selection
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NaviAsia associates in China surveyed the Chinese supply market to find suppliers capable of metal cutting, metal bending and metal stampings. In addition, the supplier needed strong injection molding capabilities and assembly capabilities. |
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Over 1,000 possible suppliers in China were surveyed by NaviAsia associates before the selection was filtered to the top capable suppliers fitting the client's supplier selection criteria. |
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NaviAsia discussed these top 15 suppliers with the company's executives and narrowed the selections down to five top choices. |
Phase II: Supplier Operational Visit and Request for Quote
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NaviAsia associates visited the top five suppliers in order to examine the facilities and validate their injection molding and metal cutting, bending and stamping capabilities. |
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The NaviAsia team also requested quotes from each of the top five suppliers. The NaviAsia team worked with the company and potential suppliers to validate the quotes for accuracy and cost competitiveness. |
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Upon receiving quotes from the suppliers, NaviAsia, along with the company, narrowed the field of supplier choices down to three candidates. |
Phase III: Negotiation Process
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NaviAsia associates, along with executives from the company, visited the factories of the top three candidates in order to inspect and more closely examine the supplier's facilities. |
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NaviAsia then led an assertive and fruitful negotiation process with each of the supplier candidates in order to achieve the best possible price for the company. |
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After successfully arranging a proposal that significantly reduced the price of each piece, the NaviAsia team helped company executives to sign a contract.
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Phase IV: Supplier Management
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After selecting a supplier and helping the company to sign a contract with the supplier, a team of NaviAsia associates established an on-site office at the supplier. |
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From the co-located in-country China office, a team of associates continuously supervise the core and sub-suppliers and acting as our client (company's) procurement, project management, project development, engineering, quality control and logistics oversight. |
The Results
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Due to a well-executed negotiation process, the company saved over 80% of the mold cost. |
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The transition to a China-based manufacturing supply chain saved the company up to 50% on the purchase price of each piece. |
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The client achieved an optimal end-to-end supply chain solution that met and exceeded their cost, quality, delivery and risk objectives. |
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