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A major earthquake in Taiwan. This key supplier had been identified and sure enough, you have a second source primed and ready to go. A few hours later, your procurement head walks in the office. “We We have a problem.” The alternate source uses the same supplier in Taiwan. Then you get the e-mail.
Avoid the pitfalls of single sourcing and learn strategies to build a more resilient supply chain. Yet, within the pursuit of efficiency lies a lurking peril: single sourcing. The pandemic was a wake-up call to the dangers of single sourcing. What is single sourcing and sole sourcing?
Many businesses use some form of Total Cost of Ownership model to support their Procurement and sourcing decisions. In fact these models are not just used casually, but they often are designed to inform and make optimal sourcing choices. Typically and historically sourcing decisions were predominantly based on unit price.
For many years the predominant priority in sourcing has been finding the lowest cost possible. What is the appropriate sourcing strategy going forward? Should you keep work in low cost geographies, establish sources in multiple geographies, or on-shore work into high cost domestic countries? Geographic Sourcing History.
Ensuring that any approach is fully compliant in order to avoid having to relocate production or supply sources often takes up a lot of internal resources. Joint tariff payment is a better strategy for both partners when compared with looking for a totally new supplier or sourcing from a different country altogether.
In 2023—if it wasn’t already—geopolitics became top of mind for every procurement professional. This year, managers and procurement professionals must stay incredibly diligent when it comes to the latest news. What would happen if China invaded Taiwan ? Tom notes, “The U.S. election will have a significant impact.”
Source: Various published PMI reporting, 2024 and compiled by Ferrari Consulting and Research Group LLC This same global wide indicator ended 2023 at a value of 48.8 At the end of 2024, global production and procurement activity levels are equivalent to the beginning of 2019, the year prior to the Covid-19 global pandemic. (
Diversify your supplier base Single sourcing presents a huge risk for companies in all industries, especially as geopolitical disruptions are on the rise. Picture this: a critical part of your product is only made in one factory in Taiwan. This is very possible, considering 60% of the world’s semiconductors are made in Taiwan.
One-third of respondents (33%) paused shipments entirely, while 29% are exploring alternative sourcing options outside of affected regions. Interestingly, while rates from China have declined, prices from Taiwan and Vietnam have remained elevatedlikely reflecting importers’ rapid pivot to alternative sourcing markets.
The newest additions to the list will impact industries sourcing critical minerals, cotton, and polysilicon used in solar modules from the Xinjiang Uyghur Autonomous Region (XUAR) of China. Engage Alternative Sources : Identify and secure new suppliers outside of high-risk regions or entities. billion USD. What Comes Next?
28% of global retailers have tried to find alternative sourcing options due to supply chain issues (RetailNext, 2020). Source: Consultancy.UK. Image source: Fortune. Image source: Financial Times. Over 90% of the United States’ semiconductor-grade neon is sourced from Ukraine. Consultancy UK). Supply Chain Dive).
China Tech Fight Widens After Taiwan Blacklists Huawei More from this author Subscribe to our Daily Newsletter! Timely, incisive articles delivered directly to your inbox. Featured Product Popular Stories Report From DPW: What’s Next for AI in Supply Chain?
In the 1970s and 80s, savvy organizations began to realize that they could make significant savings by sourcing raw materials and parts from markets such as Taiwan, Singapore, and China. However, cost and competition still need to be at the forefront of supply chain and procurement decision-making, or the business will suffer.
In the 1970s and 80s, savvy organizations began to realize that they could make significant savings by sourcing raw materials and parts from markets such as Taiwan, Singapore, and China. However, cost and competition still need to be at the forefront of supply chain and procurement decision-making, or the business will suffer.
I am a proponent of dual sourcing. The vulnerabilities with sole sourcing are very real. Most of the semiconductor fabrication is now conducted in Taiwan and China, not the United States. Single points of failure invariably lead to problems and cost more in the long run than dual sourcing solutions. Whereas the U.S.
Risks include ongoing Red Sea disruptions brought on by attacks on cargo and container ships, the ongoing Russia-Ukraine conflict destabilizing manufacturing and trade activities, along with Taiwan trade risks brought about by Chinese military drills hindering trade through major sea routes.
Such actions were to include mitigation of risks related to China based sourcing, which is now commonly referred to as a China Plus sourcing strategy. That was followed by a public acknowledgement from CEO Tim Cook that the company’s 60 percent sourcing of various production within the country was too much.
Tariffs are reshaping sourcing strategies, forcing tech upgrades, and making inventory planning a lot more complicated. Imagine a mid-market fitness equipment company sourcing metal frames from Taiwan. based cosmetics brand sources glass jars from Europe. A sudden 20% tariff hits, raising costs overnight.
China Tech Fight Widens After Taiwan Blacklists Huawei More from this author Subscribe to our Daily Newsletter! trade negotiations with China. RELATED CONTENT RELATED VIDEOS Global Trade & Economics Automotive High-Tech/Electronics Industrial Manufacturing Related Articles U.S., Reliance on China for Rare Earths Bloomberg U.S.-China
Based in the USA and later North Asia, I specialized in “Supply Chain Solutions” for North American / European Corporations with Asia Pacific manufacturing/sourcing operations”. “My Prior to that, I was with TNT for 6 years. My passion for Logistics and Supply Chain is founded from. my very structured upbringing.
The alternative supply chain or “ Altasian” is defined as countries consisting of Japan, South Korea, Taiwan, India, the Philippines , Indonesia, Singapore, Malaysia, Thailand, Vietnam, Cambodia and Bangladesh. billion in population will be the linchpin of an alternative sourced Asian supply network. One example indicated was that U.S.
The bottom three were listed as Poland , Taiwan and Myanmar. . The July S&P Global Taiwan Manufacturing PMI® was especially concerning, with indications of the sharpest falls in output and new orders in over two years. The top three regions exhibiting PMI growth were that of India, Australia and the Netherlands. United States.
This is how Dell managed to make limited supply of different products to meet demand after the Taiwan earthquake. For example, a partner that has been a stellar performer that experiences a decline, whether a sharp drop or a repeated gradual erosion, is a source of potential disruption that has yet to be realized. Transparency!
The company will henceforth outsource the manufacturing of its stationary exercise bikes and treadmills to a Taiwan based contract manufacturer. Sourcing was both a cost as well as landed cost decision factor. The move was communicated as a means to boost market share and to gain access to domestic sources of manufacturing capability.
Such extreme weather events are likely increasing in intensity and/or frequency due to climate change, and this trend points to the need for supply chain managers to begin to integrate the physical risks of climate change into their decisions about sourcing and supply network design. If so, when?
While the pandemic has given procurement managers fresh ammunition to advocate for greater resiliency within their corporate supply chains, geopolitical experts and a bipartisan coalition of legislators argue that the U.S. According to the Wilson Center’s Deputy Director for Geoeconomics Shihoko Goto, U.S. allies,” said Goto.
In this Supply Chain Matters posting, we highlight a rather significant reports indicating that Apple is considering sourcing of the chip fabrication of its advanced design semiconductor processers within the U.S. within a period of two years, and the industry implications from such a move. . Background. Significant New Development.
front that retailers and certain businesses may have procured too much inventory , and now that these inventories have arrived, the challenge will be not to exposed to a decline in consumer buying activity in the months to come. This month, the Economist Intelligence Unit revised its forecast of the overall U.S. inflation rate to be 9.2
A Response (Part 1) The annual CPO Agenda from the Hackett Group always makes fascinating reading, as it reveals the changing priorities of the world’s procurement leaders. This year it reports that the top three priorities remain the same as in 2023, but the order has changed. Cost reduction is back in the top spot, as it was in 2021.
The three specific regions of concern are the Eurozone, United Kingdom along with Taiwan. From our lens, the August data further reflects ongoing shifts in production sourcing within specific industry sectors. Global Wide Manufacturing Activity Levels Global manufacturing activity as reported by the J.P. in August compared to 57.7
The lack of momentum in China based manufacturing has had a discernable contractionary impact on other regions, especially Taiwan and Malaysia. The latter Taiwan PMI index has been in negative territory for over a year and overall business confidence levels across Malaysia ’s manufacturing sector sunk to levels not recorded since July 2021.
.” Alex Saric, a procurement expert at Ivalua, observes that poor supply chain visibility exposes companies to unwanted risks. Here, a smart approach to procurement will allow companies to improve supplier visibility, put effective measures in place and identify supply chain risks as they appear. .”[3]
Both The Wall Street Journal and Bloomberg are reporting that Taiwan Semiconductor Manufacturing Company (TSMC) , the globe’s leading advanced semiconductor device manufacturer, is considering investment in a second U.S. With semiconductor sourcing capability being viewed as “the new oil” in geo-political trade the dynamics are ever changing.
The two special regions of concern are the Eurozone and Taiwan. Further indicated were signs of weakness occurring in China , Japan , Malaysia, South Korea , Taiwan and Vietnam. Source: S&P Global and Other Sources. The data reinforces the warning signs of June and Q2, suggesting added contraction levels. from the 44.8
Source: JP Morgan and S&P Global, March 2022. The S&P Global Taiwan Manufacturing PMI® fell to a level of 54.1 There is also a developing understanding on what impacts there will be regarding supplies of key commodities that were sourced in both Russia and Ukraine. Global Wide Production Activity. reported for January.
Various industry supply chain and procurement management teams are obviously going to have to differentiate as to two different narratives presented in these separate reports. During Q2-2024, the average Taiwan PMI value rose to 51.4 The recent 52.3 reading was up from the 50.9 from the average 48.0 The index rose to 52.o
The three specific regions of concern remain the Eurozone, United Kingdom, along with Taiwan. Reported Easing Of Manufacturing Downturn in Taiwan The September S&P Global Taiwan Manufacturing PMI® report was headlined with Taiwan ’s manufacturing sector downturn now moderating by the end of Q3. reported for July.
These include export restrictions both symbolic and substantial, with China’s ban on sand exports to Taiwan in the first category and Indonesia’s announcement of a 2023 ban on exports of bauxite—the main raw material for aluminum—expected to have a substantial impact on aluminum supplies. #4
TSMC to Construct its First European Chip Fabrication Facility Industry leader Taiwan Semiconductor Manufacturing Company’s (TSMC) announced this week that the Taiwan based producer will construct its first European based chip facility that will be located in Germany.
Sources; S&P Global and ISM, 2022. Taiwan activity as reflected in the S&P Global Taiwan Manufacturing PMI® eased, rising from a depressed value of 41.6 Taiwan activity as reflected in the S&P Global Taiwan Manufacturing PMI® eased, rising from a depressed value of 41.6 but a significant 10.2
Wei, the CEO of Taiwan Semiconductor Manufacturing Company (TSMC) addressing a tech symposium last week, indicated that an endemic shortage of relatively low-cost semiconductor devices, ranging in cost from 50 cents to $10 dollars, continues to dog global automotive manufacturers in their ongoing volume manufacturing needs.
The bottom three were listed as Poland , Taiwan and Myanmar. From our lens, Taiwan remains the continued shocker, experiencing a third consecutive monthly decline and noted as equivalent to levels seen in May 2020 during the initial Covid-19 outbreak. The August index again declined to a contraction value 42.7
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The Ferrari Consulting and Research Group, via its affiliated Supply Chain Matters blog calls reader attention to two recently published research papers that address evidence of ongoing shifts in global supply component and end production sourcing. The above seems to imply, from our lens, the movement toward China Plus sourcing activity.
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