10 proven benefits of outsourcing manufacturing to China

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The COVID-19 pandemic illustrated the risks of partnering with a small number of overseas facilities. As we’ve learned, local disruption can ripple out onto the global stage, affecting consumers everywhere. China’s ‘Zero Covid’ policy has created lasting effects on manufacturing caused by worker shortages and city shutdowns. Consequently, many organizations have branched out into new markets rather than continue working with a single Chinese factory.

U.S. companies, in particular, have also been affected by the ongoing U.S.-China trade war. High import tariffs on China-made products can lead to bloated supply chain cost structures. Although both countries are working to soften tensions on the economic front, the uncertainty is too much for some supply chain executives to accept.

But moving away from China isn’t easy. Diversifying supply chains, taking on risk, and opening a company to additional operational burdens can take more time and resources than some can manage.

Fortunately, businesses have options beyond all in or all out. Instead, many supply chain leaders are beginning to adopt a China Plus One strategy– they are bringing on a second manufacturer in a different market to mitigate challenges surfacing while working with China. When implemented well, a China Plus One strategy has many advantages, particularly when the second market is based in North America.