Absolutely everyone is talking about the virus in China right now and many in the garment industry are wondering, “How will this affect my business?” It’s understandable that not only is the virus itself terrifying in its own way for human health, but the toll on vulnerable small businesses is scary as well. The truth is that the world economy is hugely dependent on Chinese goods. It often takes a potential calamity like this for the reality to sink in for some people.
We’re in the early days of the virus and it may be premature to worry. It may be quickly contained and we’ll all breathe a sigh of relief. But it may not be and it’s not unwise to start to think about how to protect yourself, your family and your livelihood from the devastating impact of a potential pandemic.
Alternatives to China Manufacturing
At a time like this, it’s worth considering diversifying your supply chain. If you are 100% dependent on China for all your goods, then you are going to suffer through trade wars or any sort of disturbance that takes place specifically in China. It’s a huge country, with stunning manufacturing capacity, but its state of being is still a bit fragile. Leadership is aging, the economy has slowed and there’s always the chance of a dramatic shakeup.
Fortunately, there are alternatives for manufacturing most things. Not at the low prices we’ve become accustomed to perhaps, but there are alternatives to manufacturing in China. In Asia, of course, there are many. Thailand, Cambodia, Vietnam. The manufacturing industries in those countries however, are largely owned by and dependent on, Chinese ownership and management. It’s easy to imagine that an issue with China could quickly become an equal issue for those countries as well. Indonesia is more independent, has greater relationships with Europe, Australia and the US as well as China. We’ve discussed elsewhere why Indonesia is a great choice for manufacturing, and this is a case in point.
China’s Long Reach
It’s naive, however, to think that simply relocating your manufacturing can solve all the problems. China is a manufacturing powerhouse. It supplies nearly every country in the world with a higher percentage of goods than any other nation. It is the Walmart of the world. If the virus affects the garment industry in China, it’s going to affect it everywhere else too. Many of the fabrics comes from China. If not the fabric, the filaments that make up the fabrics. If not the filaments, then the raw material that is used to create the filaments. See what I mean? China has deep roots into the manufacturing of nearly everything.
Balance your supply chain. Avoid putting all your eggs in one basket.
Start by Balancing Your Supply Chain
The first step to prevent your own business from catching the virus is to balance your supply chain. Make sure that you have explored alternatives to each material or component that you are using in your product. Don’t put all your eggs in one basket. The more options you have, the more control you maintain. For those items that you can’t source anywhere else, consider whether they are essential to the product. You may be able to substitute another component.
Don’t shoot yourself in the foot by making a rash decision you may later regret. Instead, plan carefully for different scenarios such as this virus affecting the garment industry. It’s difficult to foresee something like this, but it’s not impossible. Hoping for the best, while planning for the worst, is always a smart strategy. And, most of all, don’t forget to consider the lives and families of the people affected by the disaster. Take care of yourself and your business interests, of course. But remember that we’re all one people and do what you can to help and support those in need.