Shanghai’s free trade zone provides more opportunities for both inbound and outbound trade which will continue to be an opportunity for global companies to do business in a more streamlined manner. This means that foreign vessels can ship domestically from Shanghai and international cargo can be transferred in Shanghai instead of having to go other places. Plus, distribution centers in the free trade zone can fill both domestic and international orders.
Challenges in the Free Trade Zone
Despite the ease that will be created by the free trade zone, the distribution will still have its challenges. There will still be a need to communicate with 3rd party distributors in order to transport products and sell them in department stores, big-box retailers, grocery stores and specialty shops. As a result, many brands will need new ways of franchising, a more specialized supply chain infrastructure, and better sell-through and product availability. more information
Supply Chain Infrastructure
A more specialized supply chain infrastructure will be a necessity to protect brand equity. Any company that wants to remain competitive in light of all the changes that will continue to impact the supply chain, will need to study and understand the trends and changes in the Chinese supply chain. They will also need to assess how these changes will impact their company from every angle.
A Comprehensive Approach
Yesterday’s “make/ship” China has quickly become a thing of the past. China is now the “mall of the world,” with a variety of different areas of focus that include customs clearance, warehousing, and transportation capabilities. China has found these areas to be areas of opportunity. These opportunities can lead to huge competitive advantages and continue to drive the strength of many brands in China. As a result, businesses all over the world will need to take a comprehensive approach that addresses the six mega processes of the supply chain:
The Global Supply Chain
Big changes will have both positive and challenging effects on the global supply chain. However, companies can position themselves to adjust, grow, and take advantage of the opportunities that these changes will create. China has a stronghold on global supply chains which makes them a force to be reckoned with.
Any changes that impact China will have a ripple effect on the world. This means that any modifications in policy, the workforce, and automation will impact the way the world does business with China. China has morphed from being considered the factory of the world to becoming an optimized market in its own right. Businesses have to ready themselves for this powerful dynamic. Automation will have far-reaching effects on everything from the workforce to the way industries are structured and run.