Managing Risks and Building Resilience Closer to Home

by admin on September 24, 2024

While manufacturing in China has historically had its share of economic advantages, the narrowing cost gap driven by increasing production costs and geopolitical risks is prompting companies to reassess their options. Moreover, Asia’s susceptibility to weather and climate risks adds another layer of complexity to supply chain decision-making.

Supplier Insolvencies:

Compounding these challenges are the increasing insolvencies of suppliers, particularly smaller ones, and the less robust legal frameworks in certain regions. This may expose companies to risks such as intellectual property infringement.

ESG Pressures:

In response to growing societal and regulatory pressures, companies are also under increasing scrutiny to demonstrate their environmental, social and governance (ESG) commitments, leading to the emergence of green supply chain initiatives.

Key Takeaways

  1. Companies are increasingly turning to reshoring strategies in response to factors such as narrowing cost differentials and increasing weather risks in key global locations.
  2. Effective risk management, including the use of data analytics and strategic planning, is crucial in navigating the complexities of reshoring.
  3. Working with a broker can help manage supply chain risks, leverage data-driven insights and access proprietary analytics platforms.

This article was originally published by Aon.

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