This year, China is set to overtake Japan as the world's second largest economy based on GDP.

Its continued growth throughout the global recession reflects the gathering strength of its own domestic demand and the West's dependence on goods manufactured in China.

But with Western companies set on outsourcing manufacturing to this booming economy, how well are corporate supply chains aligned to the task? Are these lengthy chains robust enough? How do you gain visibility of activity across your supply chain - and how do you determine the true costs of global sourcing?

There are many considerations to take into account when companies choose to outsource to distant shores - a complexity which goes beyond a pure cost-per-piece calculation.

Procurement professionals need to fully understand the dynamics of supply chain performance over such long distances and the impact this will have on inventory holdings, capital requirements, transport costs, responsiveness to market changes and the heightened exposure to supply chain risks.

For instance, Western brands are susceptible to corporate social responsibility (CSR) risk in emerging economies, and it's not just fashion brands that are at risk.

One significant development over recent months is the move by shipping lines from fast but fuel-hungry container vessels - built for rushing Chinese goods to the US - using instead slower-moving, larger and more economic container ships. The net result is an extra few days on the lead-time for goods arriving from the Far East.

This may not sound like a great deal, but holding inventory for even a few days more can add to costs and impact responsiveness.

In uncertain times procurement professionals want greater flexibility, not longer lead-times. There is rising anecdotal evidence of companies reconsidering their sourcing strategies, with some moving manufacturing back closer to western markets.

"Buyers are looking for shorter production runs and for flexibility," says Stephen Rinsler of Bisham Consulting. "The problem with long supply chains is that they are not flexible. A retailer of electrical units may have one technology in store, another on the water and yet another technology in production - what happens if the first technology doesn't sell too well?"

According to Rinsler, there is evidence that a growing number "may be doing their first production run a long way from home, but their top-up runs much closer - mainly in Eastern Europe."

However, if distant sourcing is the considered way forward, Andrea Harris of Davies and Robson says, "Contingency planning is critical as inexperience in the mechanics of long-distance supply chains is often to blame when new outsource solutions stumble."

A significant consideration for buying organisations sourcing from suppliers in distant locations is the potential for exposure to risks related to CSR. Damage to corporate reputation and brand are central concerns for businesses operating in a global market.

How a company behaves in one part of the world can have huge ramifications for the way its reputation and brand are perceived in another. And nowhere is this more important than in the way an enterprise sources its products and services.

According to Colin Maund, chief executive of supplier management services provider, Achilles Group: "Being absolutely certain that suppliers, wherever they may be in the world, are compliant and responsive to a buying organisation's CSR policies is critical to protecting the brand. The risk to brand value from a supplier, or a sub-contractor to the supplier, using child labour, for instance, is immense."

Much of the focus within organisations over the past 18 months has been on containing costs and in particular, on improving efficiencies within procurement and purchasing departments. It's easy to understand as a small percentage saved on each item purchased can deliver a huge improvement to your profit margin.

Mr Borg (ssm@keyworld.net) attended the 'Supply Chain' conference held last month in London. For more information, visit www.ciltuk.org.uk.

Mr Borg is a trainer and consultant in logistics and supply chain management.