12/18/2022 0 Comments China plus hourly news![]() ![]() ![]() It's not a great road," Rogers said, referring to the Pan American Highway. Still, infrastructure is limited in many parts of Central and South America. The Pan American Highway spans Alaska to the tip of South America, with only the Darien Gap breaking the route. Cross-border rail can carry goods from Mexico to the U.S. Sourcing from Latin America also offers additional transport options. The country has a strong labor market and good level of education, although political unrest turns away many buyers, she said. Nike adjusted its sourcing so that NFL-related products are imported from Central America, placed on a ship and brought into the Port of Miami with a short transit time. Nike manufactures several products in Asia, but some items demand shorter lead times, Rogers said. 1 trading partner with the U.S., but sourcing executives are beginning to look at other nations in Central and South America, as well. "If I'm in North America, and my only suppliers are in North America, there's a problem here," Batiste said. Still, experts are also quick to point out that sourcing from nearby does not equate to resilience. and Canada, and it can offer significant cost benefits compared to China. Nearshoring to Mexico is more common, due to high labor costs in the U.S. "We no longer have the talent and expertise nor capital equipment to effectively manufacture key critical components of major products and assemblies." "It is extremely difficult to reverse the 30+ year trend of outsourcing and offshoring manufacturing to emerging market countries," a chemical manufacturer in the Thomas survey said. could prove challenging, after decades of standing them up in Asia and Latin America. But reestablishing manufacturing bases in the U.S. Single sourcing from China was not the only risk single sourcing from any one region was a risk.Ī Thomas study that polled respondents in March found 83% of manufacturers are likely, very likely or extremely likely to reshore, up from 54% in March 2020. Supply chain executives became entrenched in a whack-a-mole situation that continues today. ![]() Lockdowns would lift in one region, only to be imposed in another. multiple sources." The alternatives to China-onlyĪs the pandemic stretched on, no sourcing destination was immune. "We need to build a supply chain that can also receive material from other places," Batiste said. "That's fundamentally changed our supply chain in our nutrition business," she said.īatiste said she will continue to seek out other sources for the key ingredient. The short-term fix allowed ADM to keep product flowing, but it also brought to light the longer-term risks of having primary suppliers in one region or nation. ADM had to adjust its internal manufacturing to use the material. The procurement team ended up finding a suitable ingredient in South America, but it wasn't exactly the same as the product it was accustomed to bringing in from China. When the pandemic disrupted China production and exports, Batiste and her team had to "scrounge around and try to find other suppliers." The company had multiple primary suppliers of a key ingredient for its energy drink customers, but they were located in China. Show more ▼Ĭamille Batiste, senior vice president of global supply chain and procurement at Archer Daniels Midland, saw the disruption first hand. So, one worker can test positive, and it can shut a supply chain down for two weeks," Tiura said. "China is taking a very, very, very strong stance on COVID. Ports in China, as well as Southern California, are often backlogged, creating even longer lead times for importers.ĬOVID-19 outbreaks: The virus risk is not unique to China, but outbreaks have closed or limited operations at key transport hubs, such as the Yantian International Container Terminal and Shanghai Pudong International Airport. Transport capacity: Today's freight landscape is one of low capacity and sky-high freight rates for ocean shipping and air cargo. Lead times: Procurement managers have to account for manufacturing times plus shipping times when importing from China, compared to a location in the U.S. In addition, the Chinese cities of Guangzhou and Dongguan have some of the greatest exposure to sea-level rise under current forecasts, according to Verisk Maplecroft. By one estimate, the environmental impact is 25% to 50% higher than manufacturing in the U.S. And supply chains must also factor in the environmental costs of shipping via ocean or air. The country allows certain manufacturing processes that are banned in the U.S. continues to investigate suspected cases of forced labor, including in the Xinjiang region of China.Ĭlimate: Coal is a large component of China's electricity production. ![]()
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