As the coronavirus continues to take its toll on human life and the global economy, with manufacturing at a near standstill, shipping lines cancelling sailings and airlines cancelling flights, some supply chain leaders are beginning to re-evaluate their dependence on China, according to Katherine Barrios of ocean and airfreight benchmarking platform Xeneta.
“I’ve heard through the grapevine that supply chain leaders are wondering if China should be the epicentre of their chains given how many challenges the region brings,” Barrios writes in a blog posted on the site.
“A not-so-cheap workforce as once before, a challenging political situation and more and more health concerns being born in the area are definitely making regions like south Asia and countries like Mexico more attractive.”
She believes that this could be the time for companies to look at their supply chain strategies and supplier stratification. “Intense cost and risk modelling must be done on manufacturing centre locations, sourcing partners which affect trade lanes and supplier choices. What will it cost to send my cargo from A to C, instead of A to B? What can we gain if we move distribution centres from C to D and how does this impact our bottom line?”