Untangling the Knots in the New Silk Route
China/Europe Supply Chain
Ribera Segura, Jaume; Castillo, Cristina
Date: First Quarter 2012
Tags: supply chain, distribution chain, shipping, exporter, importer
While China remains the world's factory, some companies are starting to realize that the extraordinary margins they once enjoyed are steadily being eroded. Why? The rising costs of raw materials and labor only partially explain why a growing number of companies are opting to bring back part or all of the production that they had previously outsourced to China. More likely, the disjointed and inefficient supply chain between China and Europe is the bigger culprit. A study undertaken by the Port of Barcelona Chair of Logistics at the China Europe International Business School (CEIBS) in Shanghai analyzed the roles and relationships between all of the key agents and actors in this strategically important supply chain. This article highlights which aspects could be improved, and the authors recommend ways to enhance efficiency, in order for business people doing trade with China to reap the rewards without the headaches.
Tools and Frameworks:
> "What a Tangled Web We Weave" depicts how the sequential logic followed by the distribution chain between China and Europe in terms of physical flows contrasts with the tangled web formed by information flows.
> "It's Everyone's Job" highlights the inefficiencies and makes recommendations to improve the efficiency of the chain between China and Europe.
> "Portentous Possibilities" lists the largest Chinese ports, revealing the sizeable gains to be won if inefficiencies were addressed.
Injusa, Apple, DB Schenker, DHL, Kuehne & Nagel, Panalpina, UPS, E.U. Customs 2013, A.P. Moller-Maersk Group, MSC, CMA CGM, COSCO Container Lines, Hapag-Lloyd, TCB Group
Based on research conducted under the auspices of the Port of Barcelona Chair of Logistics at the China Europe International Business School (CEIBS) in Shanghai to analyze the role of each agent in the supply chain between China and Europe.
About the Authors:
Jaume Ribera is a professor of Production, Technology and Operations Management at IESE, and holder of the Port of Barcelona Chair of Logistics at the China Europe International Business School (CEIBS) in Shanghai.
Cristina Castillo is an associate researcher for the Port of Barcelona Chair of Logistics.