Current Issues

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

The Fall of ‘Made in China’

16-May-2018
The Fall of ‘Made in China’
While the Trade Wars between the US and China are ramping up, in truth China’s role within global supply chains is already weakening. As organisations recognise the need to improve supply chain risk management and resilience, Alan Gunner, Business Development Director, Adjuno, discusses the future of Made in China.

Resilience versus Cost
Consolidation has driven supply chains in recent decades, as companies have reduced supplier numbers and complexity to shorten lead times, minimise redundancy and eradicate waste. However, lean models with low redundancy create new risks – when problems occur there is minimal contingency. And with a supply chain stretching as far as China it becomes incredibly challenging to mitigate any problems that occur. Apparel retailers, for example, have just one chance to get a new range to market – miss that window and the cost in both lost sales and customer perception can be devastating.

And in an increasingly turbulent global market, new problems continually arise. During January 2018, for example, retailers experienced one of the worst performances from shipping lines in a long time – and that trend is not expected to change. The carrier markets are becoming increasingly difficult to navigate, reinforcing the risks associated with a consolidated supply chain, however slick and low cost.

Resilience is fast becoming a priority – with growing numbers of organisations already using alternative and back up sourcing options in Europe to provide fast contingency; but is that really enough?

Trade Wars
The rhetoric between Washington and Beijing is clearly a concern for all organisations currently trading with China – collateral damage is likely to affect UK and EU companies. But the fact is that China’s appeal is already waning. Costs in China are going up. This transformed country has a seen a huge rise in the standard of living for hundreds of millions of people, with the attendant wage rises. China is no longer a low cost, low tech manufacturing environment – the only way firms can access lower cost producers is to move inland, a decision which would add even greater length – and risk – to an already extended supply chain. And with such strong internal demand, Chinese companies will be increasingly focused on their own consumer base.

As a result, growing numbers of retailers are looking at other locations, both to reduce costs and to bring sourcing closer to home. From Cambodia to Vietnam, even Myanmar, there is growing pressure to move away from a China centric supply chain model.

This is not a simple shift: moving sourcing away from China will have significant implications for the supply chain. There is no single location that can replicate the depth of production options available in China: instead companies will by default end up with more locations and more locations, even different countries. Nor are the trading routes and carrier providers as well established. Organisations will need to ensure the right controls are in place, supported by real-time insight, to minimise any customer impact as a result of change.

But the fact is that China will continue to become less and less attractive as a sourcing location – and those retailers willing to make the move now, before any Brexit or Trade War related problems occur, will be best placed to minimise any risk of supply chain disruption and achieved that essential resilience and risk management.

5 EIS rules you are probably not aware of
1 day ago
TMS: an enterprise priority
6 days ago
Labeling Solutions for Global Expansion
1 week ago
Prime Day will be a $1.6bn loss-leader creating millions more Prime members, says e-commerce expert
1 week ago
Say what? The new possibilities of voice and machine driven retail
1 week ago
‘Peak faith’ in the cloud only 12-18 months away with slump to follow, warns 6point6 Cloud Gateway
2 weeks ago
As you were for UK manufacturing sector, but new business growth at three month high
2 weeks ago
Back to IoT basics: Automating outcomes to improve customer experience
2 weeks ago
Investigation of the "Fast Fashion" impact
3 weeks ago
Redefining Rental for Materials Handling Equipment
3 weeks ago
With the Intelligent Enterprise, SAP Creates “A Completely Different Kind of Flexibility”
3 weeks ago
The supply chain is only as strong as its weakest link
4 weeks ago
How to Streamline Labeling in the Pharma Space
4 weeks ago
‘A revolution happened in the way we buy services last week – and no one has noticed!’
4 weeks ago
Hot Topics at GS1 Connect? Labeling, Blockchain and More
4 weeks ago
Retailers must Embrace Change
4 weeks ago
Labeling Solutions That Bridge Islands of Data
1 month ago
My Journey to the World’s Most Important Gathering of Supply Chain Leaders
1 month ago
Workforce of the Future
1 month ago
Securing your supply chain against political uncertainty
1 month ago
On-demand warehousing could help retailers score big this summer
1 month ago
Half of organisations set for major procurement and supply chain AI investment within two years
1 month ago
Brexit, the weather & online shopping: How Britain’s favourite conversations are shaping supply chains
1 month ago
The Road to Regulatory Compliance for Your Supply Chain Labeling
1 month ago
The War on Packaging
1 month ago
Five data dramas that keep your CIO awake at night
1 month ago
As sales fall new report finds many department stores’ websites suffer from clunky integration and poor delive
1 month ago
Got Your Surfboards Ready to Master the Wave of Digitalization?
1 month ago
TrustArc to Offer IAPP Privacy Core® GDPR Training to Address Compliance Requirements
1 month ago
The Market has never been Stronger for Horizontal and Vertical API Platforms
1 month ago
Selecting the best Transport Management System - One of the most important logistics decisions you’ll make
2 months ago
“Digital Transformation” and Supply Chain Planning
2 months ago
Coolest Advice for Making Blockbuster IoT Devices?
2 months ago
How can artificial intelligence help the food industry?
2 months ago
Streamlining Operations With Waveless Picking
2 months ago
Creating a common standard for the fashion supply chain…
2 months ago
5 Steps to Improve Your Business’s Supply Chain
2 months ago
Procurement is joining the dots with technology to achieve greater strategic benefits
2 months ago
Don’t get red-carded shipping World Cup items into Russia
2 months ago
Trash talk: how waste management could become an engine for business growth
2 months ago
Could consumers drive a business tech revolution?
2 months ago
Jungheinrich Opinion: The Connected Engineer
2 months ago
Debunking the myths of the Hybrid Cloud
2 months ago
How to Future-Proof a Retail Business
2 months ago
How Enterprise Label Solutions Streamline Supply Chain Management
3 months ago
Ignorance 4.0? UK manufacturing and engineering competitiveness at risk from lack of knowledge
3 months ago
Untangling S&OP and S&OE
3 months ago
The ghosts of retail past, present and future
3 months ago
How to safeguard customer loyalty using digital platforms
3 months ago