The article Supply Chain: Making It in China by Christopher Koch appeared in the CIO magazine in October 2005. The article is about the logistical and supply chain management problems that the American companies face when their products are manufactured in China. According to the article, it may be more economical to have the products manufactured in the US as the costs savings do not materialize because of the inefficient and unorganized information system and logistics.
Q1. Summarize the issues and challenges of managing supply chain connected to China, as mentioned in the article
There are several problems associated with the supply chain mentioned in the article. The transportation system within China is disjointed and overburdened. The transportation of goods is carried out in an inefficient manner where the roads are not only dusty but also bumpy. In addition, the ports do not have the proper facilities for storing the shipments. The loading and unloading of the merchandise are dependent on the port officials and different bureaucrats. The supply chain is also dependent on guanxi or relationships and the local exporters/importers play a major role through their networks, and they also understand the systems of hierarchy in the Chinese society. Besides the role of the Chinese government is very arbitrary and they tend to interfere in any local dealings. The difference between the fully automated information system employed in the western countries and the manual spreadsheet of information is a sharp contrast.
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