Tag Archive: international

What’s Going On with Asia Supply Chains

June 25th, 2020

 

Supply chains are quite tenuous, and China drives the most volume:

  1. Coronavirus: Beijing is under a soft lockdown with a surge of virus cases. Although Beijing doesn’t impact trade, it is another sign that China vastly under reported previously and it is likely to have a new surge of coronavirus and plant closures.
  2. Manufacturers in China: Small and medium size manufacturers are not doing well. They are struggling to keep up since they had to continue paying people even when they weren’t producing. Are you watching your quality and cash?
  3. Vietnam: so far, they are faring pretty well and companies that moved prior to coronavirus and quite happy with service; if they hadn’t yet moved prior to coronavirus, it is likely on hold due to the disruption.
  4. Global transportation: Volume has picked up at all 3 ports in China (although they are dealing with a short-lived vessel shortage) and we aren’t seeing goods movement issues.

International rates are rising: they are up a hefty 12% from Asia to Northern Europe & 32% on the Transpacific route. They have taken capacity out and are slow to add it back. We’ll have to stay tuned to see what will happen.

 

 

Are you taking the continued disruption into account in your supply chain plans?

 

What Should We Consider and/or What Impacts Could Arise?

Undoubtedly, you should be thinking about how to proactively manage your global footprint:

  1. Re-evaluate your sourcing strategy: as many are already doing, the least you should do is re-evaluate your sourcing strategy. Generally speaking, the total landed cost for non-commodity products is less expensive in the U.S. than in China. Check your total cost and review multiple sourcing alternatives.
  2. Review your customers’ needs: Undoubtedly, consumer and business buying behaviors are changing during these unprecedented times. What is happening with your customer base? What can you do to get in front of the changes and see opportunities for expansion?
  3. Review your customers’ requirements: Understanding where your customers are located is a good start. It can have a profound impact on your supply chain, where you should produce and how you should set up your supply chain infrastructure. In addition, what expectations do they have? Are they expecting immediate delivery? Are their preferences changing to deliver at home? These questions will have a profound impact on your supply chain setup.
  4. Understand your transportation options: Clearly, understanding the speed, cost and effectiveness of your transportation options will be integral to your supply chain infrastructure.
  5. Understand likely disruption: Do a risk assessment to understand the likely disruption and risk associated with your options. You certainly have a different situation in China vs. Europe vs. Brazil.

Read more about this topic as well as your strategy, priorities, key trends, and your restart recipe for success in my eBook,  Future-Proofing Manufacturing & Supply Chain Post COVID-19 . If you are interested in a rapid assessment, please contact us.



The Importance of Global

July 14th, 2016

supply chain

Just returning from meeting with my global advisory board in Sydney, I happened to speak to the International Business Group of ProVisors yesterday on “Global Supply Chain Partners: Associations, Networks & Resources”. Thus, I’ve been thinking about the importance of international considerations — regardless of the business. I cannot think of a client that doesn’t have some sort of international consideration — ranging from owning, partnering or sourcing manufacturing in China or Mexico to sourcing materials and parts from around the world to purchasing machinery from international companies to supporting customers globally to being impacted by global competition…..and the list goes on.

Expanding your thought process to include global can positively impact growth, profit, company value, cash flow and service — doesn’t that sound like a no-brainer? That’s one of the reasons my APICS Chapter has put together the theme “Navigating the Global Supply Chain” for the next executive panel and networking symposium (see below).

APICS oct 29

One tip to implement this week:

The first step to navigating the global marketplace is to be aware.

If you are a CEO, business owner or GM, set aside time to think about global implications for your business. What are they today? What do you expect them to be next quarter and next year? What would you like them to be? There is vast opportunity. For example, I know of several highly successful companies that have pursued the underutilized opportunities in exports alone. There are so many more, I could write a book on this topic alone.

If you are a process owner, set aside time to think and brainstorm with your team about global impacts that affect your area of expertise. Understand them. Are there opportunities to pursue? I’d be hard-pressed to find a business that couldn’t find an opportunity in this arena. Find one and put together your thoughts, ideas and recommendations. Soon, you’ll be ready to run it by your peers and senior leaders. New worlds of opportunity will open.

Looking for more ideas to keep your supply chain connected? Access more tips and resources on my blog. And keep connected by subscribing to my newsletter and email feed of “I’ve Been Thinking…”