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U.S. manufacturers, retailers see more China risk

Thu May 21, 2009 11:30pm IST
 
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* More companies see supply chain risk in China

* Concerns rise over intellectual property

* AMR says regional supply chain strategy can cut risk

By Nick Zieminski

NEW YORK, May 21 (Reuters) - U.S. manufacturers and retailers that get products or components from China are increasingly concerned about quality, intellectual property and rising costs in China, and more are looking at alternate sites, according to a study published on Thursday.

Twenty-six percent said China contributes the most risk to their supply chain, up from 21 percent who said so three months ago, according to AMR Research Inc, a Boston-based market research firm. Other Asia-Pacific countries and the United States were seen as less risky in AMR's quarterly survey.

"The perception of risk has increased in China," said Kevin O'Marah, AMR's chief strategist.

The group works on supply chain issues with companies such as Boeing Co (BA.N: Quote, Profile, Research), Cisco Systems Inc (CSCO.O: Quote, Profile, Research), Intel Corp (INTC.O: Quote, Profile, Research), Safeway Inc (SWY.N: Quote, Profile, Research), Johnson & Johnson (JNJ.N: Quote, Profile, Research) and Genzyme Corp (GENZ.O: Quote, Profile, Research).

More manufacturers are concerned about labor costs in China and 51 percent cited product quality as a risk, up from 45 percent in the first quarter. More of them are rethinking their China strategy, according to AMR.  Continued...

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