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Sourcing Product in China Continues To Increase

Well-run logistics is critical to making the supply chain work. Sourcing from China includes dealing with significant logistics challenges, dramatically increased lead times, substantial international freight charges, local customs, and complex documentation requirements. Executing through the logistics process - from the factory door in China, to the local trucking company, to the point of export, onto the ship or cargo plane, and into the market - is vital to companies sourcing product in China. For most manufacturers, these logistics activities are a considerable cost component and are crucial to the business.

The move to offshore is driven by extreme differences in labor cost. While wage rates in the US might range from $7 to $20 an hour, and wages in Mexico might be in the range of $2 to $4 an hour, wages in China could be less than $10 a day - - an order of magnitude different. And this difference is more than enough to offset the additional freight and handling costs of the longer supply chain.

Supply chains that stretch from continent to continent are frequently set up initially using available carriers and the nearest ports. Optimizing the supply chain improves the cost and service using the best container rates, alternate ports, carriers, freight forwarders, and consolidation points.

Getting the details just right, and picking the right logistics locations and vendors can turn those difficult, unreliable sources into a smooth running supply chain.

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Supply Chain Consulting

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Supply Chain Management Specialists
 
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Not only do we thoroughly understand the supply/demand chain, but we also understand the impact working capital, cost of goods sold and margins have on profitability. If your ultimate focus is on profitability, give us a call.

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Management Consultants Specializing in the Supply Chain

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Case Study Supply Chain Analysis
Find out how Establish helped a multi-billion dollar manufacturer of consumer electronics develop a new supply chain strategy.


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