China +1 Strategy in Global Supply Chains: Opportunities and Challenges

China +1 Strategy in Global Supply Chains: Opportunities and Challenges

This course structure provides a comprehensive approach to understanding and implementing the “China +1” strategy, including practical insights, real-world examples, and an opportunity for participants to test their knowledge.

Course Sections:

Section 1: Introduction to “China +1” Strategy

• What is “China +1”?
  • Overview of the strategy where companies diversify their supply chain by adding one or more countries besides China.
  • Reasons for considering this strategy: geopolitical tensions, supply chain disruptions, and the need for risk mitigation.
• Historical Context and Evolution
  • How global supply chains have been historically centered in China.
  • Overview of China’s current dominance in various manufacturing sectors, with a focus on the electronics and PCB industries.

Section 2: The Rationale Behind “China +1”

• Geopolitical and Economic Drivers
  • U.S.-China trade tensions and their impact on global manufacturing.
  • The economic benefits and challenges of relocating production.
• De-risking Supply Chains
  • Analysis of how companies are using the “China +1” strategy to mitigate risks such as tariffs, political instability, and supply chain bottlenecks.
• Case Study: Luxshare’s Investment Shift
  • Examine the case of Luxshare shifting its expansion plans from India to Vietnam, highlighting the strategic considerations involved.

Section 3: Challenges of Implementing “China +1”

• Infrastructure and Workforce Issues
  • Challenges related to infrastructure, such as power and water supply in new locations.
  • Workforce availability and the quality of labour in alternative countries.
• Economic and Logistical Hurdles
  • Discussion on overcapacity issues, especially in the PCB industry.
  • Costs related to re-qualification and potential quality concerns during the transition phase.
• Intellectual Property and Communication Barriers
  • Concerns about IP rights in new manufacturing hubs.
  • Language barriers and their impact on quality control.

Section 4: Case Study – The PCB Industry

• China’s Dominance in PCB Production
  • Statistics on global PCB production, with China holding a significant share.
• Thailand’s PCB Manufacturing Efforts
  • Focus on Thailand’s initiatives to develop a PCB manufacturing cluster.
  • Discussion on the challenges and potential success of these new ventures.

Section 5: Strategic Considerations and Outlook

• Evaluating Your Supply Chain
  • How to assess your company’s dependence on Chinese suppliers.
  • Conducting a risk analysis for potential supply chain shifts.
• Future Outlook for the “China +1” Strategy
  • Predictions on the future of global supply chains and China’s role.
  • The potential long-term impact of the “China +1” strategy on global trade.