Foxconn to build $500 million factory in India
Electronics manufacturer Foxconn has started construction on a new manufacturing site in India, with plans to invest $500 million in the facility located in the state of Telangana. The site, known as Foxconn Interconnect Technology, is expected to create 25,000 jobs during its initial phase. Foxconn, a major supplier to Apple and other tech giants, is expanding its production outside of China, in line with Apple’s strategy of shifting more production to other countries, including India.
The move comes as Foxconn faced challenges in China, such as worker unrest and COVID-19-related disruptions. Last year, its Zhengzhou factory experienced worker unrest after a COVID-19 outbreak and subsequent lockdowns caused delays in Apple’s product shipments. As a result, Apple instructed suppliers to prepare for moving more assembly operations to other countries. In March, it was reported that Foxconn had won an order to manufacture AirPods for Apple and planned to invest in a factory in India specifically for producing the popular headphones.
The expansion of Foxconn’s manufacturing operations in India has significant implications for the global supply chain. It diversifies production locations beyond China and reduces reliance on a single country, mitigating risks associated with geopolitical tensions, disruptions, and rising labor costs. Additionally, it aligns with the trend of companies seeking to establish a more resilient and flexible supply chain by spreading production across multiple regions. As Apple CEO Tim Cook stated, the company is investing worldwide, indicating a broader shift in supply chain strategies. This move by Foxconn reflects the ongoing transformation of the global supply chain landscape as companies adapt to changing market dynamics and seek to enhance resilience.
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Demand of Shipping from Asia slows
According to research from supply chain platform e2open, there has been a decline in demand for goods from Asia, as indicated by a reduction in cross-ocean transit times over the past nine months. The findings, drawn from e2open’s extensive business network tracking billions of transactions and millions of containers annually, highlight a decrease in global demand for goods exported from Asia.
The most significant quarterly drop in transit times was observed in exports from Asia to North America, which decreased by 11 days in the past three months. Similarly, exports from Europe to North America saw an 18 day decline compared to Q1 2022, while journeys from North America to Europe were eight days shorter than the previous quarter. The uncertain supply of manufacturing components, raw materials, and agricultural goods has prompted companies to reassess their supply networks and explore global expansion options. South American ports are leveraging both the Atlantic and Pacific Oceans to transport agricultural products, minerals, and oil and gas exports, contributing to global trade.
Although the global ocean shipping environment remains uncertain, a positive trend identified in the research is the decreasing booking-to-receipt times for shipments. This suggests that companies are adapting to the challenging landscape and streamlining their supply chains for greater efficiency.
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Nike sued for false claims about its sustainability
Nike is facing a lawsuit in federal court filed by a Missouri resident, alleging that the company falsely markets its products as sustainable and environmentally friendly. The complaint cites the Federal Trade Commission’s Green Guides, which provide guidance on avoiding deceptive advertising related to sustainability claims. While the Green Guides are not legally enforceable, they serve as a reference for companies and consumers.
The lawsuit also argues that Nike’s sales of items claiming to be eco-friendly violate the Missouri Merchandising Practices Act. The plaintiff contends that Nike’s sustainability collection is not truly sustainable as it predominantly uses virgin synthetic materials that are harmful to the environment and not biodegradable, despite being marketed as eco-friendly. The lawsuit highlights that only about 10% of the products in Nike’s sustainability collection are made with any recycled materials.
If successful, this lawsuit could have broader implications for the apparel industry. As concerns about the environmental impact of plastics grow, similar legal actions might become more prevalent, potentially leading to stricter regulations. The case’s outcome could also impact Nike’s sustainability claims, particularly if the court rules that the recycled fibers used in their products are not sustainable materials.
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- Source: https://www.allthingssupplychain.com/supply-chain-weekly-wrap-up-05-12-2023-05-18-2023/?utm_source=rss&utm_medium=rss&utm_campaign=supply-chain-weekly-wrap-up-05-12-2023-05-18-2023
