How to test a Chinese supplier contingency plan
Run a tabletop exercise in which your critical Chinese factory stops supplying. Make the team demonstrate who can act, which stock is usable and whether a replacement can deliver before it runs out. Record recovery gates, failed assumptions and corrective actions. China-side checks can be supported by Cambridge China Bridge.
Set the scenario and the pass conditions
HM Treasury's Orange Book asks how contingency arrangements for high impact risks are designed and tested to support continuity, incident and crisis management and resilience. Apply that question through the buyer exercise below. Start with a critical product identified through the supply-chain de-risking guide, rather than repeating the wider risk review.
Assume the factory cannot accept orders or dispatch goods and its return date is unknown. Agree the customer commitments to protect, the acceptable interruption and the evidence needed to declare recovery. Appoint a facilitator and recorder. Use current orders, stock records, specifications and supplier contacts; label all simulated messages so nobody accidentally places an order.
Make decision authority work under pressure
Bring procurement, operations, finance, quality and the customer communication owner into the exercise. Name who activates the plan, allocates scarce stock, approves emergency spending, authorises a replacement order and releases goods. Record each person's deputy, spending authority and escalation route. Your China-side team supplies evidence; the buyer retains supplier approval and product-release decisions.
Introduce an unavailable approver, an urgent customer request and a proposed material substitution. Ask participants to show the approval route using the contacts and documents they would actually use. Record the decision, owner, evidence, elapsed time and unresolved questions. A decision blocked by an absent person exposes a gap even if everyone understands the written plan.
Calculate usable stock and the exposure gap
Reconcile stock by product, batch and location. Separate released warehouse stock from allocations, quality holds, returns and goods still at the failed factory. Check whether stock in transit is genuinely accessible and when it could be released for dispatch. Do not count unfinished goods or an unconfirmed shipment as available supply.
Use current demand and customer priorities to project when usable stock runs out. Compare that date with the replacement route through production, inspection, transport and warehouse release. Show the uncovered period explicitly. Then introduce a failed incoming batch or changed demand and ask the team to revise allocations, customer messages and escalation decisions.
Prove the replacement route can deliver
Use the second-supplier qualification guide for approval and pilot gates. In this exercise, test whether the approved alternative is available now. Request dated confirmation of its production slot, usable output against your specification, materials, tooling access, subcontractors and competing commitments. Check whether it shares the dependency that stopped the incumbent.
Distinguish advertised capacity from capacity demonstrated by production records, a suitable trial and current availability checks. Ask China-side staff to check the proposed line and its bottleneck using the factory capability guide. Introduce an unavailable component or delayed tooling transfer. Record what remains unverified and whether the recovery date still holds.
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Track recovery and close the gaps
Build a recovery record with a named owner, target date, prerequisite, completion evidence and escalation trigger for each milestone. Work backwards from stock available for customer dispatch. A discussion-based exercise can expose weak assumptions, but production and delivery claims still need operational evidence.
Debrief against the pass conditions. Give every failure a corrective action, owner, due date and closure evidence. Revise authority routes, stock records or supplier arrangements as needed, then retest the failed step with the changed evidence. Keep unresolved gaps visible and arrange another exercise when critical products, people or supply dependencies change.
| Milestone | Evidence before marking complete | Escalate when |
|---|---|---|
| Replacement authorised | Buyer approval and accepted order against the approved specification | Approval is unavailable or a deviation remains unresolved |
| Production ready | Confirmed slot, materials, tooling and demonstrated capability | A prerequisite is missing or capacity is only asserted |
| Goods released for shipment | Accepted batch inspection and shipment readiness evidence | Quality fails or transport availability changes |
| Customer supply restored | Warehouse receipt, product release and dispatchable stock | Stock runs out before replacement goods become usable |
Frequently asked questions
How do we run a supplier-loss tabletop exercise?
Simulate the factory stopping supply. Use live stock and order records, introduce obstacles, and make participants show decisions and evidence. Record gaps against agreed pass conditions.
Who should authorise switching Chinese suppliers?
Name the buyer's supplier approval, spending and product-release owners, plus deputies. China-side staff can verify facts, but the buyer retains its approval decisions.
Can we count stock still at the failed factory?
Keep it separate until access, condition, release and transport are confirmed. Base customer allocations on usable stock, with uncertain quantities clearly flagged.
Does a tabletop exercise prove replacement capacity?
No. It tests decisions and exposes assumptions. Replacement capacity needs production evidence and current availability checks; close gaps and retest before relying on the recovery date.