Editor’s Note: This is Dick Locke‘s third post as a regular contributor on Sourcing Innovation. (His previous guest posts are still archived.) Dick, who has delivered seminars to over 100 companies across the globe, is a seasoned expert on International Sourcing and Procurement who wrote the book.
I just read through AMR Research’s “Supply Chain Risk, 2008-2009: As Bad as It Gets“. It rightly points out that it’s been a scary year. It does do a very thorough job of criticizing China. I know that AMR is just reporting what their clients report to them so I can’t fault AMR for what they say.
Among the things they say
China is the world capital of supply chain risk.
And, because of such concerns,
The move away from China sourcing starts with higher value-added work, boding ill for the Dragon’s ambitions to outdo Japan’s ascent from a cheap labor to high-tech economy.
If such a move has taken place, it’s not apparent yet in the computer industry.
Here are statistics from the US International Trade Commission: HTS 8471 is computers and peripherals. Data is January through April.
| Country | 2008 YTD | 2009 YTD | Percent Change | |
| Thousands of dollars | YTD2008 – YTD2009 | |||
| China | $9,101,153 | $8,407,280 | -7.60% | |
| Mexico | $1,734,089 | $1,863,850 | 7.50% | |
| Malaysia | $3,166,961 | $1,150,911 | -63.70% | |
| Thailand | $1,138,875 | $818,513 | -28.10% | |
| Singapore | $953,493 | $543,373 | -43.00% | |
| Japan | $537,601 | $383,673 | -28.60% | |
| Canada | $280,130 | $232,428 | -17.00% | |
| Taiwan | $276,369 | $207,521 | -24.90% | |
| Ireland | $221,564 | $171,436 | -22.60% | |
| Hungary | $244,124 | $147,130 | -39.70% | |
| Philippines | $234,714 | $130,273 | -44.50% | |
| Germany | $125,194 | $104,954 | -16.20% | |
| United Kingdom | $103,245 | $94,534 | -8.40% | |
| Korea | $152,459 | $88,018 | -42.30% | |
| Israel | $47,296 | $52,556 | 11.10% | |
| Subtotal: | $18,317,267 | $14,396,450 | -21.40% | |
| All Other: | $290,471 | $211,065 | -27.30% | |
| Total: | $18,607,738 | $14,607,515 | -21.50% | |
Sources: Data on this site have been compiled from tariff and trade data from the U.S. Department of Commerce and the U.S. International Trade Commission.
Comparing the first four months of 2009 to the same four months of 2008, computer imports into the United States dropped 21.5% in value. Imports from China only dropped 7.6%. China is increasing its share of imports.
I don’t think this is a sign that computer manufacturing is returning to the U.S. However, one sign that nearshoring may be taking hold is that Mexico is one of only two countries whose absolute value of imports increased. It jumped from number three country to number two.
These USITC reports are especially useful when sourcing. Look for both high value countries and rapidly growing countries. Your best sources will probably be in those countries.