Tue, 02/18/2014 – Guy Morgan, Managing Director and Global Operations Advisory Group Lead, BBK
In the past several decades, global competitiveness has driven industries of all types to pursue a labor cost reduction model. The trend in North America alone has resulted in the following path:
Reduce cost in high cost environment
Move product to lower cost nation ( Mexico or Eastern Europe )
Move product to next lower cost nation ( China or Southeast Asia )
We are sure the reader may have participated in such outsourcing events that advertised huge savings to the manufacturer and in some cases, other parts of the supply chain. The company reaped benefits in labor and redundancy costs that hopefully offset inventory and transportation costs. But as we all know, the manufacturing environment is in a constant state of change. The failure to recognize the static nature of the business coupled with the failure of manufacturers to comply with disciplined global production systems has caused the participants to revisit the value of outsourcing and the opportunities associated with reshoring. To be clear, reshoring is the practice of returning outsourced products and assets back to the location (geographic selection) from which they were originally outsourced or removed.
Rachel Leisemann Immel, Associate Editor, IMPO
China’s overwhelming manufacturing cost advantage over the U.S. is shrinking fast. Within three years, a Boston Consulting Group analysis concludes that rising Chinese wages, higher U.S. productivity, a weaker dollar, and other factors will virtually close the cost gap between the U.S. and China for many goods consumed in North America. Bill Michels, president of ADR North America LLC, a specialty consulting firm that focuses on purchasing and supply chain management and senior vice president of the Institute for Supply management, recently sat down with IMPO to discuss supply chain strategies, government intervention, and the future of American manufacturing.
The Truth About Reshoring, Productivity, And Today’s Manufacturer
Fri, 10/04/2013 – 11:50am by Jim Shepherd , Plex Systems
There’s been a lot of buzz about the reshoring of American manufacturing business that had previously been lost to other regions. The talk seems to center on three areas:
Is reshoring actually happening?
Are we really going to make up for all the jobs lost to countries with lower-cost labor, primarily India and China?
What can we learn from success stories in order to achieve more reshoring?
Offshoring and Reshoring trends: European data
September 27, 2013 by Jan Van Mieghem
Continuing our blogs on offshoring, here is some interesting data from the European Manufacturing Survey conducted in 2009 as studied by Bernhard Dachs, Marcin Borowiecki, Steffen Kinkel and Thomas Christian Schmall (December 2012). Their survey quantifies the extent, trends, and reasons why European manufacturing firms offshore or re-shore production. Here is some of their key findings.