Lihong Wu at ISM World 2024: Navigating Manufacturing Moves from China
Lihong Wu, a seasoned strategic sourcing executive, shared insights at ISM World 2024 about relocating manufacturing and sourcing operations from China. His case study, featuring Lego which moved from Europe to China in the 1990s, highlights the complexities and considerations in such transitions.
Wu's case study involved Lego, which is now considering a move back to Europe. The process, he warned, can cause anxiety among staff and customers, making expectation management vital.
Wu advised developing a detailed implementation plan with clear milestones and resources to ensure a smooth transfer. He identified four key pillars: organizational alignment, project resources, quality control process maturity, and sourcing strategy. A scoring system was used to assess the company's success in each pillar, with scores below 3 indicating major deficiencies.
Before the move, Wu suggested conducting a feasibility analysis to determine if products can be nearshored and deciding between a complete exit from China or a China-plus-one strategy. Understanding the changing cost profile and mapping the new supply chain are also crucial to assess the impact on planning and lead time. Wu cautioned about potential intellectual-property issues during the transfer process.
Lihong Wu's case study at ISM World 2024 underscores the complexity of moving manufacturing and sourcing operations from China. With careful planning, including a detailed implementation plan and a feasibility analysis, companies can navigate this process successfully. However, they must also be aware of potential challenges like staff anxiety and intellectual-property issues.
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