India is a Strong “China Plus One” Contender, But Supply Chain Strategies Need to Be “China Plus Many”
Companies seeking supply chain resilience must look beyond a single alternative to China and build a truly diversified sourcing strategy
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Key takeaways
Companies seeking supply chain resilience must look beyond a single alternative to China and build a truly diversified sourcing strategy
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In an era of the evolving global supply chain, businesses are looking beyond China, a traditional manufacturing behemoth, for diversification. The reasoning is clear: mounting political tensions and escalating costs have driven companies to explore alternative supply chain strategies. India often surfaces as a likely contender for a "China Plus One" strategy with its vast labor force.
Yet, it faces its own challenges; despite a sizable workforce, only 14% of its economy focuses on manufacturing, compared to China's 27%. Vietnam offers a contrasting landscape: it boasts robust manufacturing but lacks the workforce. This geographic patchwork of resources and capacities underscores a pressing need for businesses to adopt "China Plus One" or even "China Plus Many" supply chain strategies to fortify a global supply chain. As Dr. Craig Austin, the Associate Teaching Professor at Florida International University, suggests, resilience in today's volatile market means having a presence in multiple locations.
You really have to pursue a strategy of being in more places than one if you're going to make your supply chain resilient.
— Dr. Craig Austin, Associate Teaching Professor at Florida International University
Dr. Austin's Thoughts on "China Plus One"
"There's no question that businesses are exiting China because of the political environment, because of costs are too high. And so, it's really, strategy of 'China plus one' or 'China plus many' places.
Many have tried to go to India. The problem with the India is like the alternatives. It has enough labor, but it doesn't have sufficient manufacturing. Fourteen percent of its economy is devoted to manufacturing versus twenty seven percent for China.
If you go to Vietnam, they have manufacturing, but they don't have enough labor. And so, this goes across. And so you really have to pursue a strategy of being in more places than one if you're going to make your supply chain resilient. And that's really the strategy."
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About the author
Craig Austin is senior export/import and logistics professional with more than fifteen years experience in all aspects of international logistics, CFS & Gateway operations, and supply chain logistics. Consistently able to manage multiple projects with competing priorities involving program development, quality control, and safety initiatives. Demonstrated capability in leading poor-performing groups toward higher productivity and excellence. A change-agent capable of leading corporate transition and process reengineering, possessing superior communication and business development skills with senior and other levels of management and staff.
