The John Molson School of Business’s Suresh Kumar Goyal helps Chinese companies learn how to get better deals.
Supply chain expert Suresh Kumar Goyal works with researchers in Chinese universities on how to improve the efficiency of Chinese suppliers and vendors.
Already a leading world exporter, China is seeking to gain further production and shipping advantages by tapping into the knowledge of supply chain management experts like Suresh Kumar Goyal of Concordia’s John Molson School of Business (JMSB). “Companies in China realize that even a one or two per cent cost reduction can make the difference in obtaining the business of large-scale distributors such as Wal-Mart,” says Goyal, a professor in the Department of Decision Sciences and Management Information Systems. “And they’re investing heavily in research, innovation, new technology and equipment, and delivery systems to achieve this.”
Hong Kong Polytechnic University is the latest Chinese educational institution to invite Goyal to propose ideas on behalf of sponsoring companies that export goods to North America and Europe. Goyal has been working to improve vendor-buyer networks for the past 30 years but says supply chains have only become mainstream news recently because more and more companies are pressured to deliver goods and services at reduced costs and with less impact on the environment.
Most vendors and buyers have already figured out that if they collaborate with one another, they’ll decrease costs. Large companies like Wal-Mart have made huge profits by minimizing costs and generating high sales volume with low profit margins. Yet these deals tend to be unfair to vendors. “One of our goals is to show companies how to make things more equitable,” Goyal says. Since it’s the same price to ship a cargo container whether it’s full or not, for instance, a savvy vendor will offer a discount if a buyer agrees to purchase enough merchandise to fill up that container. “Or the vendor could offer a discount if the buyer purchases multiple products to fill that container,” he adds.
Goyal says he’s amazed at how little North American universities and corporations concentrate on supply chain management research compared with those in China. Low labour costs and commitment to efficiency allow Chinese companies to make a profit on everything from the greeting cards sold at North American dollar stores to the $14,000, fully loaded, mid-size sport utility vehicle that four carmakers rolled out at this year’s auto show in Detroit, Mich. “Chinese automakers plan to introduce a $6,000 compact vehicle to the North American market by 2011. If those vehicles meet our safety standards, they could spell the end of North America’s auto industry,” Goyal predicts.
If you have any comments about this article, contact
Howard Bokser, (514) 848-2424 ext. 3826, Howard.Bokser@concordia.ca
