Reshoring from China: “Customers are at no risk”

Reshoring from China: “Customers are at no risk”

“Due to the Corona crisis, some customers were concerned that we would have problems with production in China, they were already talking about ‘reshoring’. But those problems were minimal, the country is large and we are not dependent on Wuhan.”

Edwin van Diessen is purchasing manager at Multifix, he has hardly seen any production problems due to the Corona crisis in China: “We have had a maximum delay of one and a half weeks for a small part of the production, the rest continued. Because we source everything twice, we have almost no risks. And if needed, reshoring is always possible.”

What is reshoring?

“Reshoring is the opposite of offshoring: you bring production back to the Netherlands. In a crisis like this, customers often become uncertain about availability, quality and turnaround times. Although we have not had any real problems, we can still help customers with reshoring if they want.”

“Multifix does not only produce in Asia, but also in Eastern Europe and even in the Netherlands. We work with different suppliers here, because we have taken over the supply chains of many customers and therefore know what we can make locally. Production in the vicinity is of course more expensive, but you can go for smarter combinations. The most important goal is that the customer is happy.”

Why did Multifix have only few problems in China?

“Multifix has many suppliers in China, so we have always been able to deliver at different quality levels and from different locations. We also consolidate our own logistics operations in Shanghai, so we had no uncertainty about transports. Moreover, we often have long-term contracts with our carriers.”

“We always have the option of changing the means of transport. Delivery by boat takes 5-6 weeks, by train 2.5 weeks and by plane 3 days. The latter is much more expensive, aviation is often called ‘failed sea shipping’. Lately we have had to use air freight more often, especially when customers had asked for an extra order. We always specify the costs in advance, so customers know how much more expensive it will be.”

“Flying is more expensive during the Corona crisis, because fewer planes are going back and forth. The main disadvantage of trains is that they only carry whole containers. Because not many companies transport by train, it sometimes takes a week before you can get on it, and then it has to drive for another 2.5 weeks.”

So you sometimes had to switch because of Corona?

“That’s right, but that’s part of it. As in previous years, we already anticipated a delay due to the Chinese New Year at the end of January. That will officially take two weeks, but some factories will also be shut down in the five weeks before and after. We will start to take this into account already in September: we study the forecasts to see which production is available in that period and have it shipped earlier. We also call the customer to see if they expect additional sales, so that we can stock more materials and ensure that suppliers have more capacity available. And that there are enough containers.”

“We also have a kind of triangular relationship with our suppliers in China: if supplier A needs a certain material, we can have it delivered from supplier B. For example, we have different suppliers for sheet metal and machining, but because they often use the same materials, it is easy to move stocks. That is another advantage of our open cost calculation.”

How long have you been doing this work?

“I have been working at Multifix for 12.5 years now, I started my career in automation and ended up at Multifix via a bed factory and a supplier for DIY stores. I like working here, there is an informal atmosphere. The short lines of communication allow us to switch quickly and our own input is appreciated.”

“The colleagues are also very helpful, everyone wants to ensure that things run smoothly. We can always follow the requirements and wishes of the customers, that is the strength of Multifix. I like to add my contribution to that.”

Want to know more about reshoring or purchasing in China? Click here: https://www.multifixgroup.com/specials/?lang=en