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Skatastrophy

China lockdowns are starting to severely hamper one of my client's ability to source goods.

The cities their factories are in are still fine, but the cities they source their component materials in are locked down delaying manufacturing & shipping by weeks+.

No information is available from the leadership of those companies or local government because China's federal government doesn't want them talking about any of this.

Inflation is going to get much worse in certain sectors before it gets better.

tower912

Indeed.   Supply issues are going to continue for years.
Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

Goose

skatastrophy

I agree 100%. The lockdown in China is hampering the ability to manufacture all across China, not just in the lockdown cities. We have been able to help our clients navigate some of these issues, but it literally is a daily struggle. Last night we moved a handful of our staff to covid free city to allow them to begin working again. I believe that things might get very, very ugly on the supply chain side of things in the upcoming weeks.

jesmu84

I think a take-away from the last 2 years is that the USA should focus on making stuff for ourselves.

Hopefully we can reverse the trend of sending so much overseas in the last 40 years.

4everwarriors

"Give 'Em Hell, Al"

The Hippie Satan of Hyperbole

Quote from: jesmu84 on April 27, 2022, 10:55:10 AM
I think a take-away from the last 2 years is that the USA should focus on making stuff for ourselves.

Hopefully we can reverse the trend of sending so much overseas in the last 40 years.


I doubt a short term supply chain disruption is going to change forty years of economic forces pushing manufacturing to China.
Matthew 25:40: Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.

tower912

It was pushed there because of lower labor costs and fewer environmental restrictions.   I am not sure the pendulum has swung so much that it would be easier to manufacture in the USA, particularly with the existing labor shortages.

However, if it was my company, I would be exploring South and Central America.   
Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

Skatastrophy

Quote from: tower912 on April 27, 2022, 11:35:05 AM
It was pushed there because of lower labor costs and fewer environmental restrictions.   I am not sure the pendulum has swung so much that it would be easier to manufacture in the USA, particularly with the existing labor shortages.

However, if it was my company, I would be exploring South and Central America.   

My client has been moving manufacturing to Africa.

I agree, though, that if the US is going to choose someone to manufacture goods for us  for cost-saving purposes it would benefit us to enrich some of our near-shore neighbors.

Hards Alumni

Quote from: Goose on April 27, 2022, 09:58:06 AM
skatastrophy

I agree 100%. The lockdown in China is hampering the ability to manufacture all across China, not just in the lockdown cities. We have been able to help our clients navigate some of these issues, but it literally is a daily struggle. Last night we moved a handful of our staff to covid free city to allow them to begin working again. I believe that things might get very, very ugly on the supply chain side of things in the upcoming weeks.

Yup 100%

Goose

skatastrophy

We have clients dipping their toe in Africa and that was on my schedule in 2020, pre pandemic. I think Africa is a long way from being a true supplier of goods and the usual products will be the first shipped in volume out of Africa. I believe clothing and shoes will lead the way and it still is going take time for these products to be made in volume needed for the USA.

The Hippie Satan of Hyperbole

Quote from: tower912 on April 27, 2022, 11:35:05 AM
It was pushed there because of lower labor costs and fewer environmental restrictions.   I am not sure the pendulum has swung so much that it would be easier to manufacture in the USA, particularly with the existing labor shortages.

However, if it was my company, I would be exploring South and Central America.   


Good point.  I should have simply said "overseas."
Matthew 25:40: Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.

Goose

tower

I was just in NYC/CT the past two days working with a client, very famous US Brand, and the topic of Central and South America was discussed at length. Our main contact, VP of supply chain mgt, spent a couple of years trying to develop Latin America has a backup plan to China and he stated he does not believe Latin America is capable of being anything more than a third tier supplier to the USA market. He is one of the smart guys we deal with and has a long track record of developing supply chains in low cost countries and I trust him a great deal.

Sad, but true, China remains options 1, 2 and 3 for far too much of our needs. We field calls daily with companies wanting to move some production out of China and very few people are willing to put the time and money into developing new markets. I believe we are going to face a very turbulent time in the global economy and it has me concerned.

🏀

Why is China locking down? It doesn't work.

MU Fan in Connecticut

Quote from: Goose on April 27, 2022, 12:52:52 PM
tower

I was just in NYC/CT the past two days working with a client, very famous US Brand, and the topic of Central and South America was discussed at length. Our main contact, VP of supply chain mgt, spent a couple of years trying to develop Latin America has a backup plan to China and he stated he does not believe Latin America is capable of being anything more than a third tier supplier to the USA market. He is one of the smart guys we deal with and has a long track record of developing supply chains in low cost countries and I trust him a great deal.

Sad, but true, China remains options 1, 2 and 3 for far too much of our needs. We field calls daily with companies wanting to move some production out of China and very few people are willing to put the time and money into developing new markets. I believe we are going to face a very turbulent time in the global economy and it has me concerned.

You were in my neighborhood!

I have a potential customer who is a major manufacturer of masks.  They are excited for us to make them aluminum wire samples and approve us for production.  Sounds like they were sourcing 70% of the wire from China and 30% from USA and they highlighted they want to convert the 70% to come from USA/Mexico.  Plus they were very happy because our aluminum raw material supplier is in Alabama.

I have a weekly corporate sales call and the China Plant Manager and the China Sales Person have been working from home.  They said things have been so strict in China that if they went into the manufacturing facility they would have to quarantine for 2 weeks just by entering the facility.  Apparently the people going in are the ones that live on the campus or in the neighborhood of the facility.  Crazy.

Goose

MU Fan

Yeah, I was in NYC and Norwalk, CT. I was very surprised by how quiet it was in the city. It made me a little bit sad.

JWags85

Quote from: Goose on April 27, 2022, 12:52:52 PM
tower

I was just in NYC/CT the past two days working with a client, very famous US Brand, and the topic of Central and South America was discussed at length. Our main contact, VP of supply chain mgt, spent a couple of years trying to develop Latin America has a backup plan to China and he stated he does not believe Latin America is capable of being anything more than a third tier supplier to the USA market. He is one of the smart guys we deal with and has a long track record of developing supply chains in low cost countries and I trust him a great deal.

Sad, but true, China remains options 1, 2 and 3 for far too much of our needs. We field calls daily with companies wanting to move some production out of China and very few people are willing to put the time and money into developing new markets. I believe we are going to face a very turbulent time in the global economy and it has me concerned.

Yeah, one of my good friends is a consultant who has been neck deep in a company that shifted a lot of its production to Mexico, instead of China.  He said the costs ended up being only a 15-20% discount from domestic production and the corruption is awful and rampant.  The infrastructure is just not there, and the corruption isn't greasing a few palms, its beyond prohibitive at times.  They considered a few other Central American locations and Mexico is what had won out.  Despite the cost, they are already looking at moving production back to SE Asia.

Hards Alumni

Quote from: JWags85 on April 27, 2022, 04:01:16 PM
Yeah, one of my good friends is a consultant who has been neck deep in a company that shifted a lot of its production to Mexico, instead of China.  He said the costs ended up being only a 15-20% discount from domestic production and the corruption is awful and rampant.  The infrastructure is just not there, and the corruption isn't greasing a few palms, its beyond prohibitive at times.  They considered a few other Central American locations and Mexico is what had won out.  Despite the cost, they are already looking at moving production back to SE Asia.

Monterrey?

JWags85

Quote from: Hards_Alumni on April 27, 2022, 04:44:39 PM
Monterrey?

No, though it was considered.  In between Ciudad Juarez and Chihuahua

Hards Alumni

Quote from: JWags85 on April 27, 2022, 05:04:56 PM
No, though it was considered.  In between Ciudad Juarez and Chihuahua

heh, I'd say everything within a hundred miles of the border is going to be corrupt.

rocky_warrior

Quote from: Hards_Alumni on April 27, 2022, 05:13:35 PM
heh, I'd say everything within a hundred miles of the border is going to be corrupt.

???

There's not much of Mexico that isn't corrupt.

Hards Alumni

Quote from: rocky_warrior on April 27, 2022, 05:24:38 PM
???

There's not much of Mexico that isn't corrupt.

Yeah, varying degrees, but yeah.

Goose

Wags

If Mexico was a viable option, we never would have gotten into bed with China. We ship a lot of goods to Mexico, but for assembly work. We were all set up to open operations in Mexico last year until we studied the business plan and saw limited chance for success.

reinko

Whole lotta America First in this thread

forgetful

Quote from: Clarissa on April 27, 2022, 11:28:23 AM

I doubt a short term supply chain disruption is going to change forty years of economic forces pushing manufacturing to China.

It might be enough to get industry to finally automate a lot of stuff domestically.

Skatastrophy

Quote from: Goose on April 27, 2022, 12:32:24 PM
skatastrophy

We have clients dipping their toe in Africa and that was on my schedule in 2020, pre pandemic. I think Africa is a long way from being a true supplier of goods and the usual products will be the first shipped in volume out of Africa. I believe clothing and shoes will lead the way and it still is going take time for these products to be made in volume needed for the USA.

Spot on, my client is in the cut & sew space.

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