The BaiyX Methodology

How we decide which manufacturers our clients can rely on: the principles behind the research, the six stages it follows, the standard of evidence it accepts and the rating it produces. Its conclusion is BaiyX Selected, a status reviewed for as long as orders run.

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Measuring a machined part with a digital caliper

Four Principles

The rules every piece of BaiyX research follows, whatever the industry.

Industry Before Supplier

Each category is analysed from the top down, from the value chain to the product, before any manufacturer is approached. Supplier choices are made against that map.

Rated by Product Line

A manufacturer can lead in one product line and trail in the next. Ratings and BaiyX Selected status apply to a product line, never to a company as a whole.

Evidence Graded by Source

Every finding records where it came from. First-hand verification outweighs records, records outweigh documents, and claims alone carry no weight.

Conclusions Kept Under Review

A rating is a current view. It is revisited on a schedule, and whenever ownership, finances, quality or delivery change.

Six Stages from Industry to Supplier

The analysis narrows step by step, from the whole industry to one manufacturer and one product line. Each stage answers one question and leaves a written record.

Industry Mapping

Where does value sit in this industry, and where is it heading?

The value chain from materials and core components to end use
Technology routes, their maturity and the direction of change
Market structure: concentration, capacity utilisation and pricing behaviour
Policy and trade measures that affect supply to your market

Why it matters. Overcapacity and price wars in several Chinese industries mean the lowest quotation can come from the supplier under the most financial pressure.

Source: RAND, An Anatomy of Industrial Involution in China, 2025

OutputIndustry map

Product Analysis

What decides performance, reliability and cost?

Breakdown into subsystems and critical components
Where each critical component is made, and the alternatives
Performance benchmarked against international reference products
A should-cost model, then landed and lifetime cost to you

Why it matters. Freight, duties, inventory, quality failures and downtime rarely appear in a quotation. One industry estimate puts these hidden costs at 20–30% of the cost of offshoring.

Source: Reshoring Initiative estimate

OutputProduct benchmark and should-cost model

Manufacturer Screening

Who can make it, and which of them should?

The full universe of manufacturers, including those absent from trading platforms
Screening on corporate registry, customs, patent, certification and court records
Manufacturers separated from trading companies and assemblers
A shortlist ranked against your application and volumes

Why it matters. Many suppliers that present themselves as factories are intermediaries, and many factories assemble core components bought from others.

OutputLong list and ranked shortlist

Company Due Diligence

Will this manufacturer be a sound counterparty for years?

On-site assessment of in-house processes, capacity and the quality system
Ownership, related parties, management and litigation history
Financial analysis: revenue trend, margins, leverage, cash flow and customer concentration
Channel checks with the manufacturer’s customers, component suppliers and peers

Why it matters. Price competition has pushed average industrial profit margins in China to around 4–5%, and supplier viability has been the largest category of supply-risk events for three years running.

Sources: Oxford Economics, 2025; Sphera supply chain risk report, 2026

OutputSupplier rating on nine dimensions

Product Verification

Does the product match its documents and your operating conditions?

Sample testing against your drawings and operating conditions
Certificates and test reports checked with the bodies that issued them
Independent inspection by agencies such as SGS or Bureau Veritas where the order calls for it
Acceptance criteria agreed in writing before production

Why it matters. Products of Chinese origin made up about 40% of the EU’s 2024 Safety Gate alerts on dangerous non-food products.

Source: European Commission Safety Gate 2024, via SGS

OutputTest and inspection record

Ongoing Coverage

Is it still the right supplier, order after order?

Inspection before every shipment, with quality and delivery tracked by order
Ownership, financial and litigation changes monitored and ratings reviewed
Spare parts and consumables planned from the first order
A qualified alternative source kept ready

Why it matters. In Deloitte’s 2025 survey, 74% of procurement chiefs named active alternative sources as their most effective risk strategy.

Source: Deloitte 2025 Global CPO Survey

OutputRating reviews and BaiyX Selected status

Standards of Evidence

Every finding is graded by its source. Ratings rest on Tier 1 to 3 evidence, and Tier 3 counts only once it has been cross-checked.

Tier	Source	What it covers	Examples
Tier 1	Verified first-hand	What we observe on site, measure in our own tests or confirm directly with the issuing body	Factory walk-throughs, sample tests, certificates checked with the issuer, our own calls with customers
Tier 2	Independent records	Records the manufacturer does not control	Corporate registry, customs, court and patent records; independent inspection reports
Tier 3	Manufacturer documents	Information supplied by the manufacturer, counted once cross-checked against Tier 1 or 2	Financial statements, internal test reports, reference lists
Tier 4	Claims	Statements without supporting evidence: recorded, never counted toward a rating	Catalogues, sales presentations, website claims

The Nine-Dimension Supplier Rating

Company due diligence ends in a rating on nine dimensions. Each dimension is scored on a five-point scale, and every score records the tier of evidence behind it. The rating decides whether a manufacturer becomes BaiyX Selected.

Dimension	What we analyse	Principal evidence
Industry position	Standing in its segment, customer base and competitive position	Industry data, customer references
Technology and product	Design capability, R&D, patents and benchmark performance	Patent records, product analysis, test data
Manufacturing depth	Processes done in-house, those bought in, and the source of key components	Factory visit, bill of materials
Quality system	Incoming, in-process and final inspection, test equipment, traceability	Site audit, inspection records
Financial strength	Revenue trend, margins, leverage, cash flow and receivables	Financial statements where available, credit and tax records
Ownership and governance	Shareholders, related parties, management and litigation	Chinese corporate registries, court records
Compliance and export record	Certificates, test reports and experience in your market	Issuing bodies, customs and shipment history
After-sales capacity	Spare parts stock, service network, technical documentation	Parts lists, service references
Commercial conduct	Responsiveness, lead-time accuracy, consistency of terms	Quotation process, sample and trial orders

From Manufacturer Universe to BaiyX Selected

BaiyX Selected means we’ve reviewed the manufacturer and verified evidence for the specific product line we recommend. We check manufacturing capability and review specifications, quality records and applicable test evidence.

We review the source while orders continue and can suspend or withdraw its status. For your order, we confirm the required configuration, fit and documentation separately. BaiyX Selected is an internal sourcing designation. Any required third-party certification is checked separately.

Stage 3Manufacturer universeEvery maker of the product line we can identify, including those absent from trading platforms
Stage 3ShortlistManufacturers that make the product themselves and fit the application
Stages 4–5Due diligence and verificationRated on nine dimensions, the product tested and its documents checked with their issuers
Stage 6BaiyX SelectedApproved to supply that product line, and kept under coverage

Three statuses, reviewed while orders run

Selected

The rating supports supply of the product line. Orders proceed, and every shipment is inspected.

Under review

A change in ownership, finances, quality or delivery triggers a fresh assessment. New orders need sign-off.

Withdrawn

The rating no longer supports supply. New orders move to the qualified alternative source.

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