Talking Supply Chain: Asking the right questions before a network move

A 2023 AlixPartners survey found that companies are targeting a 40% reduction in their exposure to China with the U.S. (plus 30%) and Mexico (plus 10%) expected to see the biggest gains. While the effort remains in the early stages, AlixPartners found that companies are making decisions based on make vs. buy strategies and investing in supplier development, logistics and distribution footprint changes, and global procurement cost modeling.

The trend is not just moving away from China, but also to more localized manufacturing. Accenture surveyed 1,230 senior executives in 14 countries (350 from the U.S.) and 11 industries in the first quarter of 2023 and found that 85% of companies plan to manufacture and sell most of their products in the same region in 2026. Today, that number is 43%. In the U.S., 91% of companies intend to accomplish this, up from 52% today.

With so many movements taking place, companies could make bad decisions if they don’t answer the underlying questions that should be guiding those moves. Nate Rosier, SVP of consulting for enVista, joined the Talking Supply Chain podcast to discuss which questions companies need to answers to for a successful move.

“There is some supplier consolidation on the one hand, and then a lot of companies learned about putting too many eggs in one basket,” Rosier said. “They’re diversifying, having primary and secondaries. And that’s making tremendous shifts across supply chains around the world. And also, the costs of everything have shifted dramatically … Everything has changed dramatically around the world. And all those things together have got all my clients moving their networks around a lot.”

Rosier detailed which questions companies need to answer first, and which factors are most important when making a move.

Listen to the full episode for more from Rosier.

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