Friday 14th Jun 2019 - Logistics & Supply Chain

The China syndrome

It might be an uphill struggle, but there are opportunities; you have to be prepared, smart  – and agile

With the ascendancy of China, both economically and culturally, will the tables be turned and Western culture no longer be the benchmark in the new world order? We know of course that China is soaking up a good proportion of the manufacturing capacity and India is snapping up British companies like it’s going out of fashion. But what next?

My personal view is that while most will see these changes as a threat they also present a huge opportunity to think differently, act differently and compete on better terms; the biggest, and most challenging, caveat for many people of course is that they must be willing to adapt to change, step outside their comfort zones and be willing to explore new avenues and ways of doing things with and within their supply chains.

British goods are still admired and sought after in India and China. Although these are huge markets that our manufacturing base can take advantage of at any time, the opportunities will only grow if British management is willing to think and act smarter – which brings me back to my opening statement.

There is no question that there will eventually be a new world order, albeit one that may further adopt western ways of doing business, and one which may yet turn out to be different to what we currently view as an East-West full frontal.

Our ways have been proven over many many years; business, being so global, will most likely continue to move along the general western path. Banks, institutional investors, and serious importers and exporters, will demand certain standards be maintained and strengthened. Surprises may be in store though, so the pressure to be lean, mean and nimble will certainly intensify.

On that subject, the agile, or smart, enterprise will be able to take advantage of most situations, whether that is setting up manufacturing in China (or Vietnam!), or relocating it to the UK/Europe to take advantage of any number of domestic, technological, currency or simple cost/resource pressure situations.

Agility means thinking outside the box…getting outside the comfort zone and looking at a number of ‘what ifs’. What if we did Plan A, and benchmarched it against what we do now (Plan WWDN) and against Plan B, just in case Plan B is the better route to go down? If you’re thinking smartly, A or B should be better than Plan WWDN.

To take that step means a little courage and the realisation that any world order can be hard on a business unless the business adapts and changes.

What does all this mean for the supply chain? It will most likely have to be different; to be de-bottlenecked; to be re-planned; to be truly smart and agile. Most importantly of all, it will need a whole new way of thinking.

Jeff Screeton is director of Aceona Management.

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