Managing Supply Chain Risks in Asia

Filed in archive Research on September 14, 2007

In an earlier post couple of months ago, I wrote about the major supply chain risks in Latin America (See: "Outsourcing to Latin America: Beware of the value chain threats"). During the same period I also received an article from Matt Elkington of Marsh Consulting which partly focuses on the supply chain risks in Asia.




I thought it would be a good idea to share some of his insights with you while there are still fresh! Elkington in particular draws attention to Asia, a region which accounted for 28.4% of EU imports in 2005. Based on the results of a survey conducted by marsh consulting, he believes the most important categories of the risk which management focuses at the moment are:

- Infrastructure risk
- Quality and counterfeiting risk
- Ethical risk (like labor laws, etc.)

The survey also indicated that western companies shouldn't rely on managing risk on asian suppliers' side. Elkington believes that western companies should acknowledge difference between perception of risk and the maturity of risk management systems in Asia and at the same time pursue a mutually agreed solution. He warns about the dogmatic approaches of some companies and reminds that such strategies might lead into negative consequences.