By Shefali Kapadia
The “Made in China” label is ubiquitous in the United States, stamped on everything from industrial machinery to a pair of flip flops. But risks — from rising costs, to a trade war, to a pandemic — have prompted companies to rethink their relationships with suppliers and China.
“We’ve realized that we put too much power in a single country,” said Dawn Tiura, CEO of Sourcing Industry Group.
The change in tone from U.S. based supply chains is not a mass exodus from China. Instead, it’s an approach that embraces diversification.
The risks of single sourcing from China had been brewing for years, but they bubbled up even more during the COVID-19 pandemic. In early 2020, manufacturing and supplier operations in many parts of China ground to a halt. The effects rippled across the Transpacific to U.S. importers unable to procure goods.
Camille Batiste, senior vice president of global supply chain and procurement at Archer Daniels Midland, saw the disruption first hand. The company had multiple primary suppliers of a key ingredient for its energy drink customers, but they were located in China.
When the pandemic disrupted China production and exports, Batiste and her team had to “scrounge around and try to find other suppliers.”
SHEFALI KAPADIA 