SUPPLY CHAIN MANAGEMENT
Disruptive factors
These first three factors contribute to stability , whereas the other two are disruptive . The first of these is that sustainability is an increasingly key factor in supplier selection . BCG recently repeated a survey it had carried out three years ago of hundreds of producers ’ outsourcing habits . This showed major differences when it came to what sustainability factors they considered most important . There was a “ big , big increase ” in those citing low energy consumption , governance and ESG standards and circularity . These factors , said Amar , are becoming more important for producers , customers and even potential employees . All are increasingly making selections on how sustainable their partners ’ operations are . Companies are consequently taking different actions to prove themselves , such as by investing in ‘ own ’ green products or deciding not to do business with companies that make unsustainable products . Finally , China is moving towards a higher-performance distribution industry . About ten years ago , outsourcing rates in China were high , largely because of the difficulties of navigating the Chinese market . It was consequently dominated by international companies with strong distribution capabilities and some local distributors with strong market access . Today , the situation is more dynamic . Local producers are increasingly using their own go-to-market structures rather than third parties . Unlike in Europe and North Americas , where producers and distributors can invest in each other and become strong partners , distributors in China are often regarded as ‘ necessary evils ’. Going forward , BCG expects the situation to reach an equilibrium , with outsourcing plateauing and international distributors focusing on their value-add in order to make producers need them . In short , China will come to resemble Western markets more . The Chinese distribution industry is also moving from the east and south of the country to the west and central areas , in accordance with investments in infrastructure dictated by the government . The market is also moving towards more direct sales in specialities , unlike other parts of the world In addition , Chinese distributors are becoming more professional and reliable in their service offering . Finally , like most of the industry , there are specific key success factors in different segments : in some , distributors are still there to move product in bulk ; in others , regulatory expertise is increasingly required . •
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Eva Van Cauwenberghe
FECC evc @ fecc . org www . fecc . org
Evening networking at the FECC congress
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