I’ve recently returned from a two week trip to China – 3,000 miles in 12 days and 10 different hotel rooms, which I’m not sure anyone could really describe as glamorous.
Since Mila made the decision to ‘chase the dragon’ and take our manufacturing offshore back in 2008, these trips have become part of my routine and, while they are always exhausting, they are also absolutely essential.
The Chinese put great store by something which they call ‘Guanxi’ which literally translates as partnership, but also contains within it all those elements of trust and mutual respect which characterise the very best working relationships. Mila’s team in China, including our new head of global sourcing Steve Johnston and his right hand man David Shao, work hard all year round to build Guanxi, but it definitely helps for me to invest my time with our suppliers as well.
It’s something which I know means they are prepared to go the extra mile for Mila and, in terms of guaranteeing both the robustness of our supply chain and the quality of our products, that can only be a good thing for our customers.
If you think things are changing quickly in the UK market, then you really should go to China. With costs rising across the board – from manpower to materials – manufacturers are having to invest huge amounts in automation and, this time around, some of the factories I visited were almost unrecognisable.
Our suppliers are clearly doing all they can to mitigate increases in costs but Chinese producer prices were up by an unprecedented 7.8% year on year to February so they can’t overcome them altogether. As a result, it’s likely that we will still face rising prices here in the UK. We’re still working hard to minimise those wherever possible, but even the Chinese economy is clearly not immune from global pressures.