Reshoring: New Day or False Dawn

Ken Cottrill of MIT finds that despite all the talk of reshoring, there are few instances of companies bringing manufacturing back to their parent country.  There’s a lot of talk, but it has materialized in very few cases.   One of the areas that has benefitted is the Midwest; he finds that machinery and plastics industries have seen a bit of reshoring.

One of Ken’s concerns is that chasing a chimera may cause us to lose focus on what gives supply chains advantages.  What will happen to our investment of time and money and energy in logistics and operational supply chain improvements if we spend them on fostering reshoring?

Reshoring: New Day, False Dawn, or Something Else? | Supply Chain @ MIT.

I tend to agree with his worry, especially in the light of decreasing energy prices.  Those will make long supply chains easier to justify from a cost perspective.  I also think currency fluctuations have been clouding our judgment about the real costs.  As the Renminbi increases in value against the dollar, US locations gain an advantage; but it is a partially controlled currency, and the balance could change without much notice, affecting  strategic longer term decisions.  And volatility of currencies is almost guaranteed in these curious financial times.

Tell us what you think!

 

The Shifting Economics of Global Manufacturing

Here is documentation on the shifts in competitiveness of different countries in manufacturing.  Interesting that Russia and Brazil are now expensive to manufacture in, and Mexico is cheap.  The US has also improved, and is now less than 5% above China.

It is a good read.

bcg.perspectives – The Shifting Economics of Global Manufacturing.

Has Truckload Capacity in 2014

Evidence that truck rates are going up is given in this article.  Many factors point that way.  Intermodal is one of the challenged areas.  Truckers simply won’t take it any more and have to raise rates.

Has Truckload Capacity Improved Since “The Perfect Storm” of 2014 – Supply Chain 24/7.

One chart from the article sjhows that in 204 rates have been creeping up in 2014 even higher.

Cold Chain

A Cold Chain or cold goods supply chain is an excellent example of a special purpose supply chain that serves a segment of shippers and demands.  In this area much innovation has occurred, and we can expect it to continue, and as with lots of innovation, it involves high tech.

Balancing Technology and Process to Maintain Your Cold Chain – Supply Chain 24/7.

To play in this segment, tracking and visibility not only of location but also conditions, such as temperature and humidity, are important.   Determining feasibility requires a complete set of business judgements, such as market values, information technology, business intelligence and dashboards, and finance and operations acuity, not just technical know-how.  An MBA degree with a logistics focus might be just the education needed.

4 Features of an Improving Supply Chain

From the MIT supply Chain log:

Understanding both business and technology is an important theme! So is cooperation! That’s what a USF degree teaches.

4 Features of an Improving Supply Chain | Supply Chain @ MIT.

Do you think an MBA is a good degree for a person in logistics?

OVERVIEW & OUTLOOK – August 2014 Container Shipping

BIMCO publishes monthly container shipping reports and outlook for the next period.  They are based on good data they collect, and are sort of a reference standard.  This summary comes from the Shipping Tribune, a daily publication that aggregates various news feeds.

BIMCO SHIPPING MARKET OVERVIEW & OUTLOOK – August 2014 Container Shipping | Shipping Tribune.

There’s still overcapacity in container shipping.  New ships of very large size are coming online, and the tonnage expected to be retired is less.  Interesting facts on building of ships and demolition sales.

The BIMCO link is https://www.bimco.org/Reports/Market_Analysis/2014.aspx

Feedback for us?