Asian supply chains built for cheap labor are breaking under growth pressure. China's wages jumped 9%, while customers now demand faster delivery and more variety. Companies need to invest in automation and digital tools, treating supply chain as core strategy, not an afterthought.
So we have supply chains in Asia that have been stretched by many years of very fast expansion, and they just cannot support the next wave of growth. The reason for that is that many supply chains were designed for a low-cost environment, and it's just not the case anymore. We have wages increasing 9% in China, and importantly, customers' expectations have increased dramatically, and they have leveled across countries. People expect a lot more product variety and much shorter lead times, just like the experience they have on the major e-commerce platforms. So now is the time for many companies to make important investment decisions in their supply chains, to build capacity in the right place, but also to invest in automation and in digital tools to make their supply chain much more efficient and much more flexible. And they need to tie these decisions to their business strategy, but also to make sure that they think about their supply chain as something that is as important to their success as their products or their brands.
