The Wall Street Journal recently released an article about supply chain movement to Vietnam and the potential issues that are being faced in that region. With thanks to the Wall Street Journal, the article correctly points out the biggest problems that are being recognized with a Vietnamese-centered supply chain.
- Lack of skilled labor
- Lack of a developed supply chain for parts and support
- Lack of infrastructure, ports, highways and logistics
We believe that while Vietnam is an option, there are other countries that can successfully meet the demands of the hospitality market. MGroup™ is facing this new reality of a diminished but not eliminated role that China will play in the supply chain by leveraging existing strong relationships in other low cost and highly efficient countries. While we may not agree with the content of every tweet that our President sends, we do agree that major American resources, like MGroup™, should be looking at countries other than China that align better with US trade policy to meet the demands of our worldwide customer base.
Look at MGroup’s™ Eastern European quartz supply chain as an example. Slabs made on Bretton equipment, the finest in the world, are crafted in Spain and fabricated in Eastern Europe. We are recognized as cost competitive and also meeting delivery dates.
Our furniture supply chain is producing in Eastern and Southern Europe, in addition to Vietnam. Our European and Middle Eastern MGroup™ clients can still utilize our immense production capabilities in China, but not the US hospitality market.
In both the quartz and furniture scenarios there is an existing supply chain, not one being built last minute, to anticipate demand. Robust and efficient factories and plentiful skilled labor are in place and capacity is committed.
As we transition to a new “world’s factory floor,” we believe that floor will be located in a number of countries. Yes, some of that factory floor will be in the US where automation and regulations will allow. China will still play a strong, but diminished, role in the hospitality supply chain of the future, but we do not think we will see the day where supply chains will be from only one country.
Vietnam will certainly play a role as will other Asian counties. For example, MGroup’s™ Mstone® millwork factory is being moved to Malyasia. 15 of our best Chinese specialized labor team have been dispatched with Business Visas from the Malaysian government to develop the local labor pool and support them with their experience in production.
We also believe that our Eastern and Southern European supply chains make a lot of sense.
Don’t get caught in the coming period of shortages of manufacturing time and over committing factories. MGroup™ has been working hard to anticipate the market’s needs, however difficult the planning might be with this onslaught of “policy by tweet.”
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