The Sino-American trade conflict will not end anytime soon, and the supply chain tariffing crisis continues to affect many companies. Thus, they must seek alternatives to China manufacturing, as it is a proactive and viable option. Numerous supply chain leaders have already started working with other Asian nations. Their challenge lies in analyzing costs related to lead time, freight, logistics, and payment terms. If you are also thinking about sourcing from Asia, look beyond China. There are various other potential options. Check them out below.
The India Alternative
Today, India facilitates manufacturing innovations and contributes largely to global supply chains. The country is more open to collaborating with the U.S today than some of its neighboring nations have been in the recent past. Since 201t4, India has been proactive about internal manufacturing reform. It was then that they introduced the Make In India Act, whose main goal was to prepare the country to be an international marketing hub.
There are several advantages of sourcing from this Asian country. For instance, there will be lower labor costs. Additionally, better jobs and rising wages make for a suitable economic environment in Asia. However, sourcing from India does not come without cons. The political scenario and the increase in the minimum wage may be a concern for some companies. They then have to look for other options.
Southeast Asia Alternatives
Thailand, Taiwan, and Vietnam are very highly developed in numerous aspects. They can quickly adapt to the competition and westernized workloads. Hiring companies will also get world-class infrastructure and ports for transportation and logistics. Additionally, stable governments and vital positions in the trade cycle make these three Asia nations highly attractive for relocation. Consult a sourcing agency in Asia first to find the ideal country for your procurement needs.
Many business organizations prefer Vietnam over the other two countries. The main reason behind this is its stellar 16% manufacturing economic growth in 2018. Also, the country is building a formidable team of foreign direct investors. Thailand is also a fine prospect, given it is the hub of the ASEAN deal. Taiwan can also be the top choice, as in 2016, it was counted as the world’s 18th largest exporter.
Despite being beneficial in various ways, there are some limitations too that you must know. For instance, Vietnam factories lack experience in numerous sectors the other top sourcing countries are experts at. In Thailand, the foreign business expansion process involves a complex paper trail which often disappoints investors. Then there is Taiwan, which has a complicated political history with China. It may influence their decisions regarding America. Keep them in mind while sourcing from Asia.
What Should You Do?
Remember one crucial thing before choosing a country for your sourcing purposes – an exit plan is as vital as your savings. The Pacific region’s politics are such now that a mediocre plan can lead to troublesome situations, just like the tariff problem. Consult a lawyer in your preferred country before you begin with the proceedings.
Contact a sourcing agency in Asia to begin the procurement process. These specialists will help you with every part of it.