The So What from BCG Every Action Has a Supply Chain Reaction
Dec 18, 2024
Bitan Datta, BCG’s Asia Pacific leader in manufacturing and supply chains, dives into Asia's pivotal role in global supply chains. He emphasizes the balance of cost and resilience amidst geopolitical tensions. The discussion highlights Asia's manufacturing dominance, driven by countries like China and India. Datta also examines how digital solutions, particularly AI, are revolutionizing supply chain management, enhancing visibility and adaptability. He shares insights on the unique challenges companies face and the need for tailored strategies in this diverse market.
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Asia Dominates Global Manufacturing
- Asia now produces over 50% of global manufacturing output driven by cost competitiveness and rising tech capabilities.
- Countries like India and Southeast Asia are emerging alongside China, Japan, and South Korea as major manufacturing centers.
Multiple 'Micro-Asias' Shape Networks
- There is no single 'Asia' supply chain; multiple micro-Regions require bespoke network designs.
- Fragmented distribution and many small local suppliers increase complexity compared with Western mega-centre models.
Design For Fragmented Distribution
- Design networks with many smaller distribution centers in fragmented markets to ensure availability.
- Place ancillaries close to manufacturing to reduce lead times and operational complexity.