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China Sourcing Supply Chain Risk Assessment

Sourcing from China can be cost effective, but concentration, tariffs, lead time variability and IP exposure add up. This ten-question assessment turns those factors into a score so you can decide where to act first.

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1. What share of your spend on critical parts comes from China?

Include indirect supply through distributors or sub-tier.

2. How many of your critical parts are single source?

3. Do you know where your suppliers' sub-tier suppliers and key raw materials come from?

4. How would a tariff increase of 25 percent change your margin?

5. How much safety stock do you hold for China-sourced critical parts?

6. How is your tooling, mold and design IP protected at Chinese suppliers?

7. How do you monitor supplier financial health and operations?

8. Could you move a critical part to another country within six months?

9. How well do your contracts handle price, currency and force majeure?

10. How quickly can you see open POs, in-transit stock and supplier status in your ERP?

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How to use the assessment

Answer for your critical parts, meaning those that stop a customer shipment if they are missing, not for the whole bill of materials. Each answer scores zero to three, and the result is shown as a percentage of the maximum. Do it with procurement, quality and finance in the room, since each function sees different gaps. Export the result to PDF and use it as the opening page of a supplier risk review.

What the questions measure

The questions cover five areas: concentration (share of spend, single source), visibility (sub-tier and ERP data), financial exposure (tariffs, currency, contract terms), buffers (safety stock, alternates and time to switch), and protection (IP, tooling ownership, supplier monitoring). Concentration and switching time carry the most real-world weight, because they determine how long a disruption lasts once it starts.

Turning the score into actions

A low score is not a reason to leave China. It is a reason to rank parts by revenue at risk and act on the top few. China-plus-one programs usually start with the most exposed single-source parts and the tooling that is hardest to move. Whatever you decide, record the owner, the date and the measure of success in the ERP or your risk register so the plan survives personnel changes.

Rank parts by revenue at risk
Qualify alternates before you need them
Agree tariff triggers in advance
Review the assessment every six to twelve months

Frequently Asked Questions

What is a China plus one strategy?

It means keeping China as a source while adding at least one other country for the same or similar parts, to reduce concentration risk. The second source may be a different supplier or a different region owned by the same supplier.

How often should I repeat this assessment?

At least once a year, and after major changes such as a tariff announcement, a new product launch, a supplier ownership change or a disruption event. Track the score over time rather than looking at one result.

Is a high score a guarantee of resilience?

No. It is a self-assessment and depends on honest answers. Test it with a disruption drill, such as asking what happens if one critical supplier is down for eight weeks, and see whether the plan works in practice.

Does this cover legal or regulatory advice?

No. It is a screening tool for operations and sourcing. Consult trade counsel for tariff classification, export controls, sanctions and contract questions.

If you want live dashboards for supplier concentration and open PO risk from ERP data, Netray can help build them on a private, read-only connection to your system.

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