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Supply chain specialist comments on possible Foxconn move into India and says India won’t be the only beneficiary of supply chain shift. Oliver Chapman, CEO of No.1 fastest growing company and supply chain specialists OCI, comments on the supply chain implications of Foxconn’s plans to build a plant in Karnataka state of India, but says he expects to see further supply diversification into other regions including in Europe and North and South America.
Oliver Chapman states: “One of the lessons of the supply chain crisis of the last year or so has been the importance of creating a robust supply chain. A supply chain reliant on any one region for supply is vulnerable. “Setting aside politics, the global supply became over-reliant on China, creating a massive supply chain shock last year as lockdowns continued in China. “There are many reasons why a company like Foxconn may choose to open more facilities in India. Furthermore, there are advantages for Foxconn’s customer, Apple too, which is anxious to sell more of its products in India. “However, we expect to see a much broader adjustment in the supply chain. Higher interest rates are leading to a greater focus on cash flow - one way to support cash flow is to shorten the product cycle from manufacturing to selling to customers. When manufacturing is carried out thousands of miles from the point of sale, long delivery schedules, with products shipped worldwide, can play havoc with cash flow. “Partly to support cash flow and partly to create a more robust supply chain, we expect to see a much greater emphasis on manufacturing goods closer to their main markets. This may mean, for example, a greater emphasis on manufacturing in Mexico and within the United States itself, and in the case of Europe, manufacturing in Poland. “Manufacturing in China will remain important and become ever more important in India - especially as consumer markets in India grow. However, we expect the supply chain to have greater geographical diversification too.”
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