129501 Resource 94086 93210 94146 1149057333172 1201212834100 Controlled Supply Chain Risks in China

Planning for Supply Chain Disruptions in China

Companies must adequately understand supply chain risk when making global sourcing decisions. According to a reasearch report by the Logistics Institute titled &quot;The Effect of Supply Chain Disruptions on Long-term Shareholder Value, Profitability, and Share Price Volatility&quot;, there is a direct correlation between supply chain disruptions and shareholder value. Aberdeen also reports that &quot;best practices&quot; including low-cost country sourcing, outsourcing, integrated supply systems, and JIT initiatives, have made companies more vulnerable to supply disruptions.<br /><br />Kevin R. Fitzgerald, vice president of supply managment research at the Aberdeen Group says that while most procurement groups save at least 30% on costs when sourcing in China, some of this is lost in unanticipated supply chain costs and other costs.<br /><br />The most common global supply disruptions include:<br /><ul><li>Poor quality or damaged goods (50%)</li><li>Missed or late deliveries (49%)</li><li>Unexpected increases in supply costs (47%)</li><li>Longer lead times (33%)</li><li>Supplier capacity contraints (32%) <br /></li></ul>According to senior vice president of Aen Trade Credit, experts believe the significant risks for foreign companies doing business in China include:<br /><ul><li>Possibilities of war</li><li>Legal and regulatory actions</li><li>Political interference</li><li>Supply chain vulnerability</li></ul> 9 application/xml false china sourcing china supply chain china supply chain risks global sourcing global supply chain risks Assessing Global Supply Chain Risks http://www.loginstitute.ca/pdf/singhal_scm_report.pdf Supply Chain Risks are Increasing http://www.aberdeen.com/summary/report/benchmark/RA_SupplyRiskMgmt_TM_1970.asp Results from US and European Companies http://www.aberdeen.com/summary/report/benchmark/RA_LCCS_KF.asp Have Supply Chains Become too Lean? http://www.cfo.com/article.cfm/5491636?f=related Increasing Reliance on China Increases Risk http://www.cfo.com/article.cfm/5572829?f=related Real Impact of China's Currency Decoupling from the Dollar http://www.sdcexec.com/article_arch.asp?article_id=7427 Mozilla/5.0 (Windows; U; Windows NT 6.0; en-US; rv:1.8.1.11) Gecko/20071127 Firefox/2.0.0.11 127.0.0.1 127.0.0.1 Establish 208.105.4.154 false true false false true 187565 false false true false false false true 94086 blog blogsite/ChinaSupplyChain/web