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  • Jennifer Marks

Making a List

Around here, we like lists — top retailers, top U.S. suppliers, top importers, top exporters to the United States and so on. But as the market continues to evolve and companies of all sizes spread their tentacles to other parts of the globe, it becomes more difficult to encapsulate them under narrow definitions.

Let's say, for example, one were interested in identifying the top suppliers in a particular product category. Let's also say that a Chinese company has taken a huge position in the category at Wal-Mart. Should that company be considered a top U.S. supplier because it supplies a significant amount of goods to the country? Or is it not a top U.S. supplier because it is not a U.S. company?

By the same token, if one were putting together a list of the top Chinese manufacturers, should American companies with sizable production facilities there be counted in that number? After all, what is in Chinese terms a “large” operation is often by American manufacturing standards fairly modest. So should a Hollander Home Fashions — which owns five factories in China and essentially owns the capacity of five more under joint operating agreements — be looked at within the realm of China as a top Chinese manufacturer?

For that matter, what of the PHIs and Keecos that have been both American and Chinese operations from the get-go? What of Revman, whose majority stakeholder is now the Mexican manufacturer Kaltex?

Even the term “supplier” has morphed. Many U.S. suppliers today own little or no production. They are product developers, marketers, sales organizations and distribution operations. Under such a scenario, should a trading company such as Li & Fung USA be considered when forming a list of top U.S. suppliers?

The situation is also pertinent in discussions of retail direct sourcing efforts. Putting Wal-Mart and possibly Target aside, most retailers lack the infrastructure to scour the countryside in far-flung provinces for the next great resource. Sure, they have buying offices in Asian countries, and they are increasingly staging their own mini-trade shows overseas. (A look at ShanghaiMart's event calendar for March and April is instructive here. There are such events on the schedule for Sears, Sears Canada, MarMaxx Group, AMC, Kmart and Target.)

Many a U.S. supplier with offices overseas will acknowledge that retailers placing orders through the offshore branch count that transaction as “retail direct” — with the added benefit of continuing to deal with a known enterprise. Indeed, that's why some suppliers open offices overseas in the first place.

In practical terms, a sale is a sale — whether the paperwork originates in Shanghai or San Francisco. And a supplier with offices in New York, Mumbai, Karachi and Shanghai is a global resource — even if it sells its goods into only a couple of countries, say the United States and Canada.

Ultimately, a company's roots matter less than its resources. That's something list-makers will have to adapt to.

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