**London**: DHL Global Forwarding’s new whitepaper, ‘China Plus X: The New Global Supply Chain’, offers insights for companies diversifying supply chains. It highlights the need for robust infrastructure, cost assessments, and skilled workforce availability in new regions like Southeast Asia, Europe, and South America.
DHL Global Forwarding has published a whitepaper aimed at companies seeking to diversify their supply chains beyond the conventional ‘China Plus 1’ strategy. Titled ‘China Plus X: The New Global Supply Chain’, the document provides an analysis of how businesses can effectively mitigate risks and enhance operational flexibility by broadening their manufacturing and supplier networks across various geographical locations.
The report underscores that geopolitical tensions, trade barriers, and disruptions brought about by the Covid-19 pandemic have highlighted significant vulnerabilities within global supply chains. In light of these revelations, DHL Global Forwarding explores alternative production sites in regions such as Southeast Asia, Southern and Eastern Europe, the Middle East, and South America. These areas are increasingly seen as viable options due to their developing infrastructure and regulatory environments that are favourable to trade.
To assist companies in the selection of production and supply chain locations, the whitepaper outlines five critical criteria. First and foremost, the importance of a well-developed transportation infrastructure is emphasised. The report notes that countries like Vietnam and Mexico are making substantial investments in their logistics networks, thereby enhancing their attractiveness as potential manufacturing hubs.
Another key factor highlighted is the cost structure associated with logistics, which entails a thorough assessment of logistics expenses, labour costs, and overall return on investment. This analysis is essential for businesses looking to optimise their operations while controlling expenditure.
Moreover, the report points to the significance of both digital and physical infrastructure quality. Factors such as broadband capacity, the quality of transportation facilities, and new developments including airports and rail lines are critical for ensuring supply chain efficiency.
The availability of a skilled workforce is also deemed essential, particularly as nations like India are investing in education to ready their populations for emerging industries such as semiconductor manufacturing. This skilled talent pool is pivotal for companies aiming to establish operations in these regions.
Lastly, the regulatory environment constitutes a major consideration for businesses, as aspects like taxes, tariffs, customs policies, and trade agreements can adversely affect operational efficiency and cost-effectiveness.
By focusing on these key areas, DHL Global Forwarding’s whitepaper provides a comprehensive framework for companies looking to navigate the complexities of global supply chains in an evolving economic landscape.
Source: Noah Wire Services
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