The supply chain continues to break in multiple places. CMD’s Jennifer Clement was recently a guest on the WAM podcast where she discussed:

• A new problem in ocean freight that permanently reduces capacity
• The impact of Ukraine on global supply chains
• How to address quality problems when remote control isn’t working

Watch more on Women & Manufacturing >>

Key Summary on Sourcing and Manufacturing in China:

1. Distribution Challenges and Strategies:

   • Companies are exploring creative logistics strategies, such as placing distribution centers closer to ports rather than markets to address bottlenecks.
   • The U.S. logistics landscape faces challenges like a shortage of truck drivers, warehouse capacity, and chassis.

2. Supplier Oversight and Quality Management in China:

   • Many companies experience quality and delivery issues with Chinese manufacturers due to communication gaps, often exacerbated by remote management and travel restrictions.
   • Common problems include poor product quality, delays, and operational inefficiencies like material backup at inspection facilities.

3. Boots on the Ground Approach:

   • Local teams in China are crucial to managing relationships, auditing suppliers, and ensuring adherence to production and quality standards.
   • On-site audits typically uncover 30–50 actionable areas for improvement, with plans implemented to ensure sustainability.

4. Impact of Pandemic and Travel Restrictions:

   • The inability to maintain regular in-person visits with suppliers has weakened relationships and quality control.
   • Dependence on local teams has grown, highlighting the importance of real-time oversight during production.

5. Supplier Risk Management:

   • Single-sourcing remains a significant risk, prompting some companies to diversify suppliers and explore alternate sourcing in regions like the U.S. or other countries.
   • Supply chain risk assessments are recommended to address logistical, quality, and geographical risks.

6. Material Shortages and Geopolitical Impacts:

   • Ongoing material shortages, rising costs, and geopolitical tensions (e.g., between the U.S. and China) influence sourcing decisions.
   • Companies are advised to engage deeply with suppliers about material management and prioritize orders to maintain production schedules.

7. Proactive Supply Chain Strategies:

   • Steps like sub-assembly sourcing, alternative material selection, and robust logistics planning can mitigate risks.
   • Engineering and materials teams are critical in optimizing costs and ensuring consistent product quality.

Insights:

• Effective supplier management requires a combination of localized oversight, strategic audits, and risk assessments.
• Despite geopolitical and logistical challenges, many companies remain committed to sourcing from China due to economic considerations.
• Diversifying sourcing and enhancing local management are key strategies to navigate current manufacturing and supply chain complexities.

Related readings on outsourcing to China

Four Key Steps When Outsourcing Your Production to China