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Point of view
by ehsan on January 23, 2008
Many manufacturers in U.S. are currently shifting their sourcing base from Asia to the Americas. The falling U.S. dollar, limited free trade agreements, high energy costs, and rising production costs in Asia are some of the factors which according to David Blanchard, SCM expert, contribute to companies reevaluating their supply chains.
The new conclusion is: Move the sources closer to their home markets (obviously U.S. is the biggest market for many products).
Apart from the reasons mentioned above, the recent quality issue in China have acted as an accelerator for this shift. While Asia is still popular, Mexico is becoming an increasingly popular source for manufactured goods as companies compete on time-to-market strategies.
Permalink: Reverse flow of offshoring back to America
Trackback: http://publish.creative-weblogging.com/publish/mt-tb.pl/111401
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Vote for Reverse flow of offshoring back to America:
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Rating: 9.67 out of 3 vote(s) cast.
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Response from:
Josh Breinlinger
(01/22/08 9:41pm)
Response from:
Justin
(01/25/08 7:58pm)
This theme is cropping up in a lot of blogs and publications. One collateral benefit is that it would generally amount to a greening of the supply chain as well, I would imagine. It'd be interesting to do a high level analysis of how the "retracting" of the supply chain argument is advanced in relation to currency and oil price fluctuations.
Anyway, thanks for nothing this as it's an interesting development to watch for this year, for sure.
Anyway, thanks for nothing this as it's an interesting development to watch for this year, for sure.
Response from:
Arthur
(02/27/08 5:43pm)
Good to see people are starting to talk about it. I think that those that are just starting to head to China already missed the boat.
For some of them, the motto seems to be "Buy Low Cost Country - No matter what it costs!" There may still be opportunities for saving out of LCC's - but a company should better have a good "reverse plan" in place.
In addition to the factors mentioned above, at most 5-8 years from now governments are going to get really serious about global warming and doing something about it (till now they've only generated hot air). And consumers may ask what is a product's CO2 footprint - not just production and distribution, but the entire supply chain.
For some of them, the motto seems to be "Buy Low Cost Country - No matter what it costs!" There may still be opportunities for saving out of LCC's - but a company should better have a good "reverse plan" in place.
In addition to the factors mentioned above, at most 5-8 years from now governments are going to get really serious about global warming and doing something about it (till now they've only generated hot air). And consumers may ask what is a product's CO2 footprint - not just production and distribution, but the entire supply chain.
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-Josh