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Supply Chain Intelligence
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Activity:
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last activity : 07 06 2010 20:18:09 +0000
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Global supply chain required to remain competitive
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Markets are global
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Ideas in:
"Global Supply Chains: Are They Dead?"
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Further, global supply chains assume relative political stability and
even that is in question moving forward. Imagine a company finding
itself in the position of being cost non-competitive due to a complex
global supply chain built up over years of assuming low cost fuel and
transportation. Further, while being cost non-competitive, they also
find their supply chain disrupted due to some global geo-political
event. That is the double whammy creating the perfect storm that could
shut down a company.
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No supporting Arguments for this idea
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am not sure it is that simple.
Our markets are global by nature these days. The fundamental question
is whether we can economically produce a similar product in multiple
locations around the globe. What is cheapest, manufacturing in multiple
locations, or manufacturing in one location with extra transportation
costs? That's the fundamental question companies should ask themselves
over and over again. And actually fuel costs are not the only element
affecting that decision. The evolution of labor cost in some parts of
the world is starting to change the equation all together.We may end up
in a couple years with a centralized model (one manufacturing
location), but located in a very different part of the world.
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This has a very obvious implication for suppliers. Most organizations do not pull from suppliers, and many of those that do have "pull" systems in place are pulling from a supplier that is operating in "mass production" mode. This means that additional... |
I think the answer is, of course not. However, global supply chains are built off of the assumption of low fuel costs and low transportation costs. Neither of these are the case anymore and we have to ask ourselves if we ever will see low enough... |