The benefits of outsourcing the manufacturing of products to China are well known. However, the supply chain stretching from China to the U.S. is incredibly long, in relation to both time and distance. The extreme distance creates many complexities that can stall production which can create a whole set of problems that can in turn cause damaging or even fatal loss of revenue for your business.
This is why effective supply chain management is absolutely crucial for any buyer doing business with a partner in China.
Problems
The first main problem that comes from these complexities is the inflation of inventory. Larger safety stocks, bigger batches, and earlier order dates are often necessary to make sure that you have the supply to keep up with your demand. This stresses your budget because of the increased order sizes and the correlative facilities needed to store the larger inventory.
The second main problem, which is less visible, is the loss of sales. If you are unable to deliver your products on time, or unable to keep up with demand, then you are missing out on sales. Any delays that reduce the amount of time your product is available on the market means a decrease in sales and a loss of revenue.
Solutions
Communication and coordination ability
It is absolutely crucial for supply chain managers to fully and completely understand each step involved in their supply chains. This allows them to be able to look into each step and figure out if it is running to maximum efficiency. Offshore manufacturing managers should have experience with several different types of assignments. The more accounts they’ve managed, the better they will be able to coordinate each step of the process.
Flexibility and alternative options
Unless your supply chain is 100% efficient, then your management should never stop looking for alternative options for suppliers and service providers. Transportation, customs, freight forwarding, handling and distribution centers all offer various solutions to your problems, and each one should be explored.
Inbound consolidation
The ability to decrease lead times by having a warehouse that can receive and ship full container loads that arrive ahead of schedule can help immensely. If your company is well organized, you can cut out an entire step—shipment from port to a centralized warehouse, handling at the warehouse and shipment to a regional warehouse—and save both time and money.
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