Power cuts in China and manufacturing impact

A Wall Street Journal article (18 May 2011) describes electricity rationing in Taizhou, China, which required some factories to halt production one day a week in March, two days a week in April and three days a week in May. The impact is use of generators, powered by diesel, which are more polluting than electricity generation sources and increase costs.  These power cuts are in anticipation of demands for air conditioning, lower rainfall levels and faster growth in demand.  Should one conclude that the cost of manufacturing in China will rise to cover these constraints in power availability ? Will lead times for orders have to increase to accommodate production capacity constraints ? Do all these factors suggest a need to rethink the cost advantage of outsourced manufacturing ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , , , . Bookmark the permalink.

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