Don’t feel guilty if you did it or supported it. Outsourcing to China seemed like a good idea for about 5 minutes. The issues started small then began to loom ever larger for the construction industry and especially our suppliers.
Now, most of our suppliers are reconsidering outsourcing to China. Some are doing something about it.
Construction Industry Needs To Diversify Sourcing
For so long, “Made in Taiwan” was an industry joke. It represented cookie-cutter solutions or less-than-quality materials. It never caused us concern about Taiwan taking over our country or our culture. But China is different.
The pandemic of 2020 was our wake-up call. Manufacturing stopped in China. Sourcing Industry Group’s CEO Dawn Tiura says it best: “We’ve put too much power in a single country.”
Like it or not, our marriage to China has done a lot of good. We can’t divorce China; perhaps we shouldn’t. But we need to explore other sourcing options.
Current risks of China-only sourcing include:
- COVID-19 – China is working hard to end risks of pandemics. “One worker can test positive and it can shut a supply chain down for two weeks,” said Tiura.
- Environmental pollution – China uses manufacturing processes that are banned in many countries, including the U.S. This means construction industry outsourcing to China results in 25%-50% greater environmental impact.
- Forced labor – We cannot ignore the suspected human rights violations in China that may include forced labor.
- Increasing costs – Now, wages in China are higher than Mexico. Good for Chinese workers; expensive for many U.S. businesses.
- IP theft – U.S. manufacturers are discovering their intellectual property has been reverse-engineered or stolen.
- Tariffs – Import tariffs as high as 25% have led to trade wars and supply shortages.
- Transportation issues – See: Freight shipping/cargo backlog in California.
- Turnaround time – Shipping from China takes longer than from North or Latin America.
The construction industry needs to find supply chain solutions from multiple sources. Our dependence on single-sourcing from one country limits us – or shuts us down – during crises.
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