RISK MANAGEMENT
and transportation routes ; and alternative suppliers and raw materials . In industries that are heavily reliant on advanced technologies , shifting sourcing and / or manufacturing out of China may not be advantageous given that much of the technology that is being built or made in China requires specific skills from an educated workforce that are not necessarily easily transferable elsewhere ,” reflects DHL Resilience360 ( now Everstream Analytics ).
Of those looking to move their productions elsewhere ( 30.6 per cent ), the driving factors included a greater need for supply chain diversification ( 31.3 per cent ), reducing reliance on China for sourcing essential materials ( 17.9 per cent ), tariffs and other trade-war related disruptions ( 15.9 per cent ), market access and regulatory restrictions ( 5.1 per cent ) and greater domestic competition ( 3.1 per cent ). Key candidates for the reshoring of productions include the European Union ( 15.4 per cent ), the US ( 12.3 per cent ), and Mexico ( 10.3 per cent ).
“ Taking into consideration the impact of the COVID-19 crisis , the preference for shorter and more localised supply chains is understandable ,” says DHL Resilience360 ( now Everstream Analytics ). “ Those supportive of bringing off-shored manufacturing back to or closer to their native countries through re-shoring and / or near-shoring have longargued that repatriating more domestic operations would ensure stronger quality controls that have been overlooked in the past in order to capitalize on lower labor costs .”
However , due to the highly integrated nature of global manufacturing and supplier networks , “ it remains to be seen if multinational firms — should they commit to such a process — are successful in reducing supply chain reliance on China ,” says DHL Resilience360 ( now Everstream Analytics ).
procurementmag . com 123