China Sourcing: The Wait (and Risks) Get Worse

Many of you probably already saw this BCG report news from May that our global infrastructure is not up to supporting the pace of our trading growth with China. According to the study highlights, "congestion at North America's West Coast ports and continuing capacity problems at major European ports have complicated the China sourcing equation to such an extent that companies need to consider alternatives ... While there is still some excess capacity at major European ports, and steps are being taken to expand capacity, the situation in the US is far more serious and more complicated—with many ports experiencing virtual gridlock. Because there is no politically viable solution, they say, the effective result is 'a giant non-tariff trade barrier.'"

If that whets your appetite to learn more, the full-text of the study (no registration required) provides outstanding detail into the landmines -- and potential mitigation steps that we can take to avoid unnecessary risks -- that China sourcing creates from a logistics and supply chain perspective. Among other areas, the authors discuss the academic and philosophically underpinnings of the dangers of "lengthening supply chain." All in all, even though BCG's practice in this area is relatively small, it is reports and analysis like this which support their place as a top tier global advisor for supply chain and operational strategy.

- Jason Busch