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Is There Really an Integrated Asia-Pacific Supply Chain?

Supply chains in the Asia-Pacific (APAC) region pose a unique set of challenges for the organizations that rely upon them. With a land mass four times the size of Europe, transportation and distribution issues are complex and challenging. The region's diversity, in terms of regulations and political climate, as well as its sheer size makes it difficult to think of an integrated Asia-Pacific supply chain.

Is There Really an Integrated Asia-Pacific Supply Chain?

Indeed, the contrasts from country to country can be dramatic. Within Asia, the 2012 Enabling Trade Index identifies Singapore as the world leader in developing “institutions, policies, and services facilitating the free flow of goods over borders and to destinations.” Hong Kong ranks second, China 56th, Thailand 57th, Indonesia 58th and India 100th. S

The nature and direction of APAC trade has changed dramatically, as well. Through most of the 20th century, APAC’s supply chain flows moved largely from east to west, as countries with low-cost labor manufactured low-cost products for export. More recently, however, emerging middle classes have made some APAC countries centers of demand, prompting the flow of products imported from Europe and North America. As APAC economies grow, more companies based in Asia (or those with Asian subsidiaries) are manufacturing products for use in their own countries, or for distribution to other Asian countries.

The very term “supply chain” implies a straight line and a singular operating mode, with tight linkages moving goods smoothly from mode to mode and location to location. In Asia-Pacific, however, this concept is unrealistic. The region’s extreme diversity calls for multiple supply chains that are tailored to the requirements of specific regions and communities.

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