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Yes, if it must be in Asia I am considering India, along with other options, depending on type of commodity, like Vietnam, Thailand, South Korea, etc. If you can start localizing then even better. In general I see two consistent mega trends: 1.more supply chain agility and transparency with 2. mitigation against geopolitical and economic crises. If I had to look out to the next decade, China continues to be a great manufacturing base but with a lot of negatives regarding those two mega trends. I do not trust that China offers great agility or transparency and I do not trust that they will avoid geopolitical or economic crises.
I think additional considerations should be taken to develop new suppliers where related industries are thriving, those are more long term bets but the larger industrial players are already thinking this way. You can continue to source in China but start looking at how to start small with other suppliers or build a more local supplier by on-shoring or re-shoring to your region.
I am director of supply chain at a CPG company and this is a huge focus to try and steer as much away from China as possible. Many of our suppliers who were in China are either adding additional locations in the Thailand/Cambodia/ Vietnam or closing and moving in total. Some of the headwinds of raw materials are real in which they are still getting from China when there is nothing locally. There is a lack of infrastructure to move goods. The second issue is usually trained work staff. We have had item quality issues on start up that the workers should have seen. Third are lead times as these countries do not have internal roads or rail to move goods and to go 100 km can take a few days. Ports are getting better. Hope this helps
Really insightful response, D1, thank you!
How have you seen cost profile change as you shift within Asia and then to near/on shore?