Sourcing Companies in Guangzhou – Impact of Climate Change on Supply Chain

Sourcing Companies in Guangzhou – Impact of Climate Change on Supply Chain

Supply Chains as a Game-Changer in the Fight Against Climate Change | BCG

Supply chain management is necessary for producing globally profitable products. These supply chains have been optimised for efficiency and include international sources.

However, the COVID-19 outbreak, and climatic changes have businesses concerned about the ability of their supply chain. The risk of disruption increases due to climate change and its extremity. 

Companies can depend on several supply chain options, but all can be affected due to climatic changes, which can significantly impact the business.

A crucial issue for associations is to evaluate and strengthen adaptability, given the dynamic interaction between force chains and climate risks.

China faced tremendous weather challenges last year. Floods, droughts, wildfires, and power outages have impacted various regions.

This affected their production and supply chain, and many sourcing companies in Guangzhou lost their potential Western clients. 

49% of the sites in the United States, China, and Taiwan saw increased climate changes, with China and Taiwan experiencing it more frequently.

Nearly all Chinese locations observe greater heatwaves. These areas are at a high risk of experiencing extreme weather events like storms, floods, heat waves, droughts, and fires. 

Climate change has impacted the sourcing companies in Guangzhou, China. Unpredictable rainfall patterns can affect supply, transportation, and supply chains in the same way as intense heat waves, heavy rain, and flooding can.

These disruptions bring on delays, damaged commodities, and increased operational expenses due to climatic changes. Additionally, rising temperatures have an impact on energy usage and cooling needs. 

To adverse the harmful effects of climate change on their operations and ensure long-term commercial viability, sourcing companies in Guangzhou must adapt to the climate-flexible plans, alter supply chain logistics, and invest in sustainable practices.

According to the 2035 National Climate Change Adaptation Strategy, the Ministry of Ecology and Environment and other agencies have emphasised infrastructure resilience, industry climate response, and tackling the economic slowdowns due to climatic changes. 

Tips to Create Climate Change Adapted Supply Chain

  • Draw a detailed map of your supply chain, including all international manufacturing, warehouse, distribution, and maintenance locations accessible by different means of transportation. Assemble information on costs, risks, turnaround times, and environmental impact and update them annually.
  • For effective mitigation methods, consider natural disaster vulnerability, local economy, geopolitical factors, energy availability, resources, supplier and consumer proximity, labour stability, and climate risk diversities.
  • Often businesses focus on their location rather than on the suppliers. Companies that proactively manage their suppliers’ network can usually handle climate calamity faster and more swiftly. 
  • Businesses should quantify the income loss from site disruptions to effectively allocate funds for improving supply chain resilience and prioritising investment in mitigation measures.
  • Use models to develop plans and evaluate various network arrangements and sourcing options for better executive decision-making and risk management related to climate change.
  • Make sure climate models are sensitive enough. Executives in the supply chain must exercise great caution to spot these early indicators of climatic uncertainty.
  • Create a supply chain that responds to climate risk in a way that provides business continuity and a clear competitive advantage. If they calculate the revenue impact each site’s disruption would have, companies can easily cover it with insurance. 
  • Suppliers constantly risk breaking environmental or labour rules, which might result in lawsuits, license revocations, shipments, or even government action due to climate change. Inform and contractually force suppliers to backup plans, alternative sites, and recovery timelines to achieve flexibility. 

Today, supply chains are facing significant threats due to climatic conditions. Therefore, finding a sourcing agent in China to help sourcing companies in Guangzhouprepare backup plans during climatic changes is relevant. This way, your supply chain isn’t disrupted and your business and supplier gains profit. 

Category Business

Skye Marshall

Ivy Skye Marshall: Ivy, a social justice reporter, covers human rights issues, social movements, and stories of community resilience.