While China has taken steps to address safety concerns after the recalls of last year, yet small players all round – both among Chinese manufacturers and European importers – tend to be the soft spots in the supply chain.This article, at the China Sourcing Blog, points at what is probably the weakest link in global supply chains: the fact that the more you outsource, the less control you have over your supply chain. If everything goes right, the cost are low, but, if something goes wrong, the stakes and costs are high.
The China Syndrome
Although written with China in mind, this article applies to any kind of outsourcing.
With today’s elaborate global supply chains, moreover, the deverticalization of the manufacturing process through off-shoring and outsourcing does not change that ultimate responsibility of companies to take things in their own hands through all stages of the sourcing process.
Is outsourcing risking it all? In essence, by outsourcing, you give someone else control over your supply chain. It easy to loose oversight, assuming that everything will be perfect, and that every link in the chain will be bound by the contract you made with your first-tier supplier…you could not be more wrong! The ultimate responsibility always lies with the sourcer, not with the source.
Who is at fault?
Is China really to blame, or are the drivers and causes of this crisis originating from much closer to home? Yes it is, says Mary B. Teagarden in her article called Toy Stories:
Instead of simply blaming China, we must take a hard look at American issues, those that we can control, that contribute to this problem. In so doing, we will see that we are a big part of this problem. American big box retailers and their unrelenting pressure on suppliers for ever-lower prices bear part of the responsibility. American importers focusing on cost and investing in brand rather than quality and supply chain integrity bear part of the responsibility. Parents who want low-priced toys in response to their children’s requests for the latest television-advertised toy bear part of the responsibility. Finally, the American government’s choce to chronically underfund watchdog agencies like the Consumer Product safety Commission is part of the problem.
We do not control China. China controls China, Teagarden says. Although we can do whatever we can to influence China, we must also do our best to manage our share of the problem, because risk is the only thing that companies cannot outsource.
Link
- chinasourcingblog.org: Weak links in the supply chain
Related
- husdal.com: Outsourcing – risking it all?
- husdal.com: Are you the weakest link in your supply chain?
- husdal.com: Toy stories – Learning from the China recall crisis
