优化国际供应链 | 法律午餐 | 第 8 集

welcome everyone to another episode of the Legal Lunch Byte today I’m joined by Pete Mikhjian from Supply Chain Resources Group in North Carolina we are talking today about optimizing International Supply chains Pete thanks for joining me today great thanks Jonathan happy to be here so let’s talk about Supply chains uh from your background first please tell us tell us who you are uh what your background is and particularly what SCRG does for companies in managing their supply chains sure sure so I’ve been in manufacturing for about 20 years or so and about half of that duration focused on International manufacturing with contract manufacturers and electronics Manufacturing Services Industries so uh it’s been kind of part of my blood for again the past 20 years or so we provide world class engineering and operations talent to help our clients optimize complex supply chain and manufacturing challenges so basically we’re enabling our partners to streamline operations maximize efficiencies conserve cash and it I mean essentially what we’re doing is allowing our partners to fully leverage Offshore Manufacturing that’s that’s the core of our business and I got exposed to SCRG through uh through transaction actually through your one of your investors and uh this I got to learn about the business model and it was one of my first private equity uh transactions and it was very interesting because we were in multiple countries I I think we covered uh the time you had Assets in three four maybe five different countries and so we were looking at all of the um you know all the the contracts all of the the services and really getting a read for what you do around the world and I I frankly I was I was really impressed I thought it was fantastic and certainly providing a service how many employees did you say that there are across uh across the world managing you know kind of being there on the ground helping supply chain uh in the manufacturing sites so we’re we’re just under 350 some Personnel so we’ve been around for around 15 years or so uh and those 350 Personnel it’s it’s quality Engineers it’s program managers it’s tooling experts it’s buyers it’s planners uh they have supported over 430 some products that we’ve helped you know bring to life essentially and we’ve got over 4,000 supplier partners that that we actively work with and manage so it’s a big group it’s been growing like crazy a lot of the growth has been India uh Mexico it’s Cambodia it’s Philippines it’s Indonesia Singapore Malaysia uh it’s it’s been growing quite a bit I think a lot of the uh the big picture in terms of manufacturing is this China plus one strategy I mean that’s how we’re seeing a lot of these companies you know ensure resiliency and I think during Co I mean that that’s really everyone everyone kind of got taken this taken as side taken back by what we saw during Covid right with with China just being able to shut down the ports shut down you know shut down everything uh in the name of State security to make sure that people wouldn’t be dying on the docks I mean just so much uh you know and in the factories right there were there I think we were all just kind of shocked and then of course you have the um shipping costs that went up by 3 4X during that time so it just everyone was was dealing with all of these issues and thinking my supply chain is riddled with risk now you know and and it was before but nobody really you know we hadn’t stress tested yet right and Co was a big stress test yep yep if you’re you know we’re seeing companies that are they’re focusing on reducing supply chain risk and it’s by it’s reshoring it’s nearshoring it’s utilizing multiple vendors for the same components it’s having those vendors be located in in different regions and you know ensuring even that the the sub Supply chains aren’t coming from the same region either if you go back 10 15 20 years ago the trend was to Outsource your supply chain and consolidate uh that way your your spend and your Leverage is through the roof and you’re basically reducing costs the pandemic and geopolitical tensions really they’ve they’ve made everyone second guess that strategy and now we’re seeing pretty much the opposite uh clients still want to Outsource but they rather pay for that diversification to ensure the continuity of their products and their supply chain that’s what we’re saying and small and medium sized companies especially are having a very hard time retooling their supply chains they just don’t have the you know the in-house expertise to tackle four or five new countries to develop redundant suppliers and and you know and going like you said going multiple layers deep into the supply chain yep you got it you got it it’s um I mean whether it’s a small company medium sized company large big blue chip uh startup companies all the way to establish for 20 some year 30 some year companies uh they’re all trying to get their hands around supply chain and understand how to diversify that risk understand how to reduce costs where you can and you know ensure that continuity of their product so they can actually have something to sell uh you know to their end clients sure so let’s talk for a minute about regions before we dive into specific countries so what are you seeing in terms of regions you know what up and coming I’m always curious about you know we hear about southeast Asia certainly uh you know India South Asia you know countries I’m just curious who are some of the Front Runners right right now in terms of countries maybe expertise you know which countries or which regions are doing certain things well and which ones seem to be struggling Ling to to adapt to this new this new supply chain reality yeah if if you look at China solely I mean the the supply chain and the robustness of the components and the ease of Transportation within the region I mean that they’re just so strong you know it it would be difficult for you know any major company to to get away from China what we’re really seeing is China plus one so they’re saying we’re going to stick with China for the core of our you know supply chain but at the same time we want to diversify that risk we want to look at potentially Vietnam uh you know Vietnam has limited infrastructure but they’ve got a labor pool that’s getting more and more in terms of skill set uh Philippines you’ve got some political instability there uh but it’s another up and coming area uh India they’ve definitely got a fragmented infrastructure um but you know there’s ways to get around that and that is growing like crazy as well Mexico uh same story they’ve got some potential challenges but uh a good area to grow and to support you know the US and market so in terms of specific regions it’s it’s China plus one so we could say Vietnam say Philippines India uh and and Mexico as well so you and I talked before we turned the camera on a little bit about comparing China to Mexico I’d say that Mexico is is very much a part of what we’re focusing on uh just the nature of proximity you know us proximity to Mexico we have we have native Spanish speakers at our firm and so for us I think that at the top of our list for a variety of reasons not just because uh I mean I’d say you know time difference cultural Affinity uh shipping uh shipping proximity all of those things you know political risk there there are a lot of reasons why Latin America makes sense but you mentioned I thought it was interesting that uh if people are going to Mexico solely for cost savings they might be disappointed in that can you explain that a bit right you got it we do have a lot of we’re in China today we want to expand to Mexico to save costs and in reality uh yes you’ll most likely save on Logistics cost um but but besides that you know even with some tariff impacts depending on the HTS code coming from China to the US or coming from Mexico to the US depending on if you’re in a Mador or not your your cost of Labor is still higher in Mexico your available labor hours from a manufacturing standpoint is actually smaller than they are in China as well and you know those couple reasons typically end up showing us almost at par or or even more in terms of costs coming out of Mexico than uh than coming from China so the idea of going to Mexico for a cost savings is unlikely yeah so if it’s just on cost alone then then they may not see the the bottom line depending on who who in the company is evaluating whether or not it’s a good decision right if it’s just a financial decision versus factoring in the other sometimes incalculable potential risk depending on you know we’re talking political risk is a big part of my world right and thinking what political and Regulatory risk because those are things that are very difficult to quantify but certainly are very realistic risks when you’re looking at Supply chains that are based you know wholly in China so let’s talk let’s talk about um I’m curious talk a little more about the labor hours because in Mexico um shorter working days fewer people is it is it kind of a people times hours uh quantification what what does that look like the the first thing I think about are like the number of shifts available so depending on you know the region it’s either two shifts or three shifts uh that’s that’s one the other piece to it is typically in Mexico it’s you know you’re you’re are not working on Sundays they just don’t do that um culturally the the China side they’re very involved with their work they’re very deep into the minutia they put the hours in and you know they working seven days a week you know I don’t want to say that they like it but I would say it’s it’s acceptable um so there’s literally if I have a p&l for China and a p&l for Mexico I’m building the exact same product I’m going to have uh essentially better efficiency and better output from China just due to you know the amount of hours available to to do the work it’s very interesting it is very interesting because I hadn’t really considered you know I haven’t spent time working in a Chinese Factory so I don’t know the working conditions right I don’t know what kind of what the norm is for all of them but that makes makes very good sense so how do you see countries like uh Mexico moving let’s say we take a Mexico or in India or Philippines or Vietnam how do you see them moving you know kind of coming into their own as they’re stepping up to be the the number two after China you know how do what do you think they’re um their timeline might be let’s say you know how long’s is it going to take a Vietnam to absorb kind of get maxed out um to accept as much business from from China as possible maybe the same with you know India or Mexico when so for part of my job was always deciding where a specific product should go uh you know geographically it should it be in China should it be in Mexico should it be in India should it be Vietnam and then why and when you look at some of the decisions that you know you typically look at before you can say look definitively this is the right place to go to and this is why uh you look at the uh the you know the proximity to the HQ or the proximity to where a lot of that labor team is essentially are you in the same time zone is it easy for you to communicate with them um you know past that I look at like skill set of the Personnel that are there you know are we are we assembling something that’s very complicated over the top or is it something that is very straightforward and simple and only has a few you know components within their billing materials uh you know those couple things really start to help paint the picture of what the right uh facility is for you where the right geography is uh when I think about Mexico it’s it’s definitely coming up like crazy they’re moving very quickly uh the skill set is is very high uh in terms of the complexity of products I’m thinking about you know some generators that I may have done in the past that are not necessarily generators but they’re you know 2000 some components on the building materials the product is the size of this hotel room essentially you know each one of those units is a million plus dollars that that is something really over the top very complicated laser alignment uh super complex that type of product I’ve personally seen being built in Mexico and not having an issue if I move that to Vietnam I don’t think that it would not be the same in terms of output and efficiency uh and and and even cost it’s just culture a little bit different the skill sets are a little bit different the demographics uh they all would have an impact on you know the output of that specific product that’s great let’s we’ve just got a minute or so left let’s talk about infrastructure because for me I’m always fascinated with the idea of uh you know when I really dig into the geography of a country and you know whether they have navigable waterways whether those you know their population centers are close to the coast or not whether they actually have geography that permits them to have uh functional ports whether those have to be dredged or whether the geography is just too you know impossible to do it something you don’t you don’t see even if you’re looking at a world map you don’t really think about that so let’s just maybe some parting thoughts in terms of of infrastructure development and how important that is in a country like India and how far away they might be from really optimizing their you know their natural geography to to you know and then overlaying their infrastructure to really make it functional that’s a that’s a good point so for India you know super fragmented infrastructure uh you know there there’s a lot of dirt roads you know plain and simple uh and that’s definitively impacting the efficiency of the transportation know the way to get around that is to utilize multimodal Transport Solutions um but it’s definitely going to have an impact on you going back to Mexico you know if you’re in Monterey or you’re in Tijuana or you’re in Juarez there’s very straightforward simple access essentially to the US border and and I’m just thinking about you know that that transportation that Trucking route is it’s simple it’s straightforward it’s been around for a long time it’s very developed and uh you know every four hours essentially there’s a truck coming by to pick up goods from either of those different regions coming to the US border so it’s very different in terms of the support level and the you know infrastructure buildup level excellent excellent well Pete we’re at our time I appreciate you taking the time to to meet with me today it’s fun to catch up and hear how things are moving and certainly we’ll keep an eye on your work cool great thanks Jonathan appreciate it excellent thanks