Diversification- A “key” to successful Supply Chain Management.
As we all have learned the hard way in our investment portfolios, if we get too far out of balance in one market, stock, or investment and a downturn hits we are much more likely to suffer a greater loss and take a longer period to recover. This means we need to take the time to frequently evaluate our investment strategy and rebalance our holdings to ensure we are evenly distributed over a broader range of investments. Also, being long-term oriented, and not making short-term, quick emotional responses to frequent, short-term market/economic changes will lead to much better returns over time.
Our supply chain strategy should mirror our investment strategy. We MUST have a macro global perspective in how we manage and focus our material purchases. When looking at the current events in the world around us today; on the one hand, moving all of our sourcing out of China in the short term, due to the “trade war,” may seem like a good idea, but that is akin to pulling our investments out of the stock market when things look choppy. With 6.9 million unfilled jobs in the US already (many in manufacturing), there is no chance that our manufacturing base can create enough capacity to handle all the components/products that are sourced in China today by resourcing them back stateside. The sheer numbers of Chinese workers making the products being imported into the US today, based on a population that is 4 times larger than the US, makes the notion of displacing all the work back here difficult to fathom. BUT, it is wise to look for multiple global partners to spread your supply chain risk across more than just the US and China. There are partners to be found in India, Vietnam, and elsewhere around the world that can mitigate the risk and provide solid service and quality for your organizations. These broader geographies will help to create a platform for the future that will spread your vendor portfolio and not allow any single event or issue in one geography to dominate the day.
World Resource Partners is positioned to help with the task of “supply chain diversification”. Give us the opportunity to help create a more secure future for your business. We would be glad to explore alternatives with you.