Despite the increasing size of Western companies in China and tight supply-chain connections between Chinese and Western organizations, few of the companies operating in China are interested in sophisticated supply chain management systems.

Instead, Chinese companies and global corporations with operations in China say that are looking for supply chain management technologies that offer local support, are scalable, can be modified and are reasonably priced.

Reebok China, for example, recently opted for a mid-sized SCM system.

A sophisticated integrated system is best suited to a more mature process and business model, company executives said. While Reebok China plans to invest in a full-featured system in the future, it chose a more modest package now to meet its ever-changing needs.

"There is a big difference to use a high end system like SAP for example, where the entry fee is at least $1 to $2 million," said James Wong, chief operations director at the sporting goods company. "In our case a middle-sized solution can cost $500,000."

Other companies even operate with supply chains that use technology only in the most basic way, or that operate completely without automation.

Even the global French retailer Carrefour—with 10 years experience in China—has no automated supply chain system in place. Carrefour is Europe's answer to Walmart and has a very significant presence in China.

"We are assessing the situation to see to what extent we can apply a supply chain system but first we are thinking of a logistics solution," said Philippe Riou, the Carrefour executive in charge of supply chain development in China. "The distribution is not mature. The producers are adjusting to the production network and many companies merge and go into partnerships, making it difficult for us to have a stable source and very difficult to design a proper, efficient network."

As a result, many companies seeking to optimize their operations choose simple solutions from local vendors, which cost under 1 million yuan ($125,000).

Foreign vendors are scaling down to compete. SAP China, an inter-enterprise software vendor, is customizing its offering to meet business demands in China.

"We changed our strategy a bit and now we also have middle-market solutions at a similar price as local ones," said Kevin Jiang, in charge of business development at SAP. From its pool of more than 500 customers, many are foreign-invested, joint ventures or global companies, but Chinese-owned firms represent at least 50 percent of SAP's customers here, he said.

However, interest in making a viable and smooth production flow is making headway in China and the government is supporting these efforts. Almost all provinces in the country are developing logistics pools and parks. Also in developing the infrastructure, logistics is included in development planning policies.

Many argue that the communication and distribution networks are not yet mature. In the retail sector, vendors are operating through a distribution network dotted by many wholesalers along the line. From a supply chain point of view, there are no short-line markets.

"We are not able to plug in directly to the factories," said Carrefour's Riou. Still there is a lot of room for progress.

"Particularly on the side of the vendors, there are changes going on," he said.