From the outbreak of the coronavirus (Convid-19) many companies including importers, retailers, and distributors have been dramatically affected. The China plant closures, and travel restrictions have greatly impacted both small and large buying companies. Hyundai and Ford have stopped much of their automotive production for two months. Apple has delayed its global product launching plan. And nearly two-thirds of the Fortune 500 companies have noted the impact on their first quarter analyst earning projections.
Do you have a contingency plan for your Chinese supply chain? Especially plans for outside of China?
In the near term, you still must rely on China for your Asia supply chain – but more and more manufacturing activities have been and are moving out of China. These moves are predominantly to the neighboring countries of Vietnam, India, Bangladesh, Cambodia, Turkey, and others.
It is time to diversify your supply chain for the security and longevity of your business. It is strongly suggested to build new and meaningful connections with suppliers and future partners in other Asian countries. Many of these countries provide the same level of quality and low-cost sourcing – in addition to having lower or no duty or tariff penalties.
Here are a several things that we suggest for you to do:
1.Keep in close contact with your current suppliers in China. Learn what they are doing to relocate their operations and where their industry is migrating.
2.Develop your knowledge and global acumen of the neighboring Asian countries.
3.Make trips to the main destination countries – especially Vietnam, India, Turkey, and Taiwan.
4.Join our recommended LinkedIn industry groups and forums. Connect with people, manufacturers, trade networks, and industry experts. Everyone on the forums are glad to help and assist in sharing about their countries and the opportunities available.
Having contingency plans for supply chains outside of China is urgent and crucial. Options and alternative strategies are essential to supply chain continuity. Please contact us at Victure Industrial – we are ready and able to assist you in your supply chain planning and preparations outside of China.
Here are a couple of recommended LinkedIn groups for supply chain diversification-
China Sourcing- https://www.linkedin.com/groups/4462099/
India Sourcing- https://www.linkedin.com/groups/8454669/
Vietnam Sourcing- https://www.linkedin.com/groups/8815822/
Asia Sourcing- https://www.linkedin.com/groups/8909383/