By Nick Lung.    Photo：Tiger Lily

The risk of China as the core of the global supply chain has gradually increased. In order to avoid supply chain disorder and adapt to changes in the international situation, Sony has recently transferred most of its camera series products exported to Japan, the United States, Europe and other China to Thailand for production. In addition, the U.S.-China technology war and trade conflict have led many major electronics assembly companies to expand their production capacity outside of China this year to meet customer requirements. Vietnam, Thailand, the United States, and Mexico are all popular regions for companies to transfer production capacity. Although China's production capacity accounts for the largest proportion of foundries, it seems to be a trend to move some production capacity to regions outside China.

The situation of the layout of Sony and many electronics factories above shows that China, as the factory of the world, is facing rising wages, political instability and other factors, which have caused companies to accelerate the transfer of supply chain bases. European and American companies can focus on neighboring countries and try to find ways to improve domestic manufacturing and distribution possibilities. Some industries, including healthcare, technology and pharmaceuticals, are increasingly looking for ways to stay local and are building more warehouses, especially core storage facilities. Doing so has the advantage of building more stocks of needed goods within borders, ready for shipment when needed. It reduces the risk of goods getting stuck in supply chain lines, even during disruptions to global supply chains. This approach can also be used as experience for companies in Asia. Setting up warehouses in the customer's area can also confirm that the inventory level is sufficient. Challenges, unstable shipping schedules, shortage of containers, and various unstable factors caused by the epidemic in the country of origin, ensuring warehouse inventory at any time can further ensure smooth shipments.

As businesses navigate the "new era", distribution and manufacturing companies are studying the changes and challenges posed by the global COVID-19 pandemic to innovate, transform and find the best way forward. Companies that build more flexible and adaptable approaches in their supply chains will be able to reduce risk, improve cash flow, and give consumers more confidence that goods will be available during disruptions.

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