Today on the International Trade Resources Podcast, our host Kim Kirkendall is joined by Hiten Shah, founder and President of MES, an Inc 500 company supplying critical components from Asia, to discuss supply chains shifting to India. With tension between the U.S. and China, many companies are setting up dual sourcing in India. In this podcast episode we explore the latest trends and best practices for how companies can optimize and control multi-region supply chains.
We discuss the benefits of sourcing from India. One of the largest growth areas is the automotive and component supplier segment. Hiten also summarizes other key industries including textiles, electronics, and software, and the regions currently on the rise in India. One limiting factor is that India is a net importer of raw materials, and so it has to balance its domestic needs versus what it can export.
Other challenges to sourcing in India include poor infrastructure, government bureaucracy, and regionalism. The business environment in India is one of the issues any foreign national could struggle with, and Hiten recommends having local team members, managers, and leaders to help you navigate the regulatory compliances and paperwork. The slow pace of the regulatory environment in India significantly impacts the speed with which things move. Each region has its own labor pool, but there are pockets where labor conflicts and competition can cause challenges.
Kim and Hiten discuss the importance of managing teams in India. Like in China, there is a very hierarchical management style where employees defer to their superior. Therefore foreign management often ends up encouraging staff to increase independent thinking. Listen to the podcast to hear more about developing your staff.
They agree that Dual Sourcing can result in challenges when coordinating suppliers between two regions. There are multiple sets of tools, product changes, the challenge of keeping two suppliers busy, packaging differences, and raw material differences. Hiten shares some of his experience on how to manage these multi region supply chains and the importance of gathering all the details as you're developing the product and communicating clearly and quickly between the stakeholders in the supply chain.
Finally, Hiten and Kim recap the best methods of navigating changes in the an expanding supply chain. These include having a customer focused strategy that determines the sourcing direction makes the decision more clear. Some components to a good strategy include having a strong MRP system, and planning teams! Hiten shares many of the key components his company uses to multi-region supply chain success.
Things you’ll learn
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