Building resiliency Regionalised sourcing has become a hot topic for discussion within supply chain circles in recent months , with organisations seeking to source products closer to home .
Many firms have begun using nearshoring as a strategy – in other words , locating their suppliers and distributors nearer to their operational centre or the final destination of their supply chains .
While this might mean incurring higher upfront costs , a reduction in travel time can bring savings and mitigate environmental risks , an issue which became apparent during the pandemic as entire nations were cut off from each other . It ’ s a strategy with the potential to come to the rescue during periods of instability , while decreasing cycle times for product delivery .
Ultimately , however , the goal is to boost resiliency and navigate potential disruption .
Shedding light on the conversations taking place between Maersk and big-name clients , Marcus Ng , Head of AP Air at Maersk , says : “ One of the major topics often brought up in discussion is how to ensure supply chains are resistant to unforeseen disruption .
“ We are seeing a noticeable level of diversification of manufacturing sites to other Asian countries [ away from China ], where customers are seeking to build more resiliency into their supply chains . Where some are choosing to retain manufacturing sites within China , it is purely focused on domestic demand .
“ However , China is still the manufacturing hub of the world . A customer might shift their assembly from China to Mexico or India , but where do all the raw materials come from ? So , in one way it might build resilience , but it will still take time to diversify the source of all the raw materials .”
106 May 2024