Sourcing or moving manufacturing to China?

May 22, 2007 by SwizStick  
Filed under China, Supply Chain Management

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Then you better exercise due diligence before making such a move. All Roads Lead to China has an excellent post on this very topic, an issue we have discussed many times in the past. From ARLTC:

For anyone who was a supplier to Wal-Mart (or any other retailer) in 1997 or in 2002, this was a point made crystal clear to those who were supplying from China. If the dates don’t ring a bell, in 1997 UPS drivers went on strike and in 2002 Long Beach Dockworkers were locked out as part of heated contract negotiations. In both cases, the potential economic impact that these disruptions was largely unknown by the general public. Once meetings began breaking down, and the folks over at the networks picked up the story, the fact that without UPS or consistent flow of containers, Wal-Mart and others may potentially be severely impacted..

Overseas suppliers were the least prepared… Some firms were forced to move heavy good via air freight, some accepted penalties from retailers, and the lucky ones who planned ahead shipped early at high rates…

Now, many of those firms have plans in place now to recognize, plan for, and mitigate any future disruptions… but since 2002 there have been 1000s of firms who have extended their supply chains for the first time, and have not fully planned the possibilities.

Read. The. Whole. Thing.

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