I was just interviewed by SAP Insights about the localization of supply chains and whether reshoring is a pipe dream or reality. Stay tuned for that article although this hot topic continues to arise as manufacturers and product-based companies realize the significant risk of having their full supply chain offshore without a well-thought-out strategy. Listen to my What’s Happening video and read my recent article in Brushware magazine, Reshoring: Is it All Hype or Action? In addition, I moderated a panel of global manufacturing and supply chain experts about Reshoring in a Post COVID World. Listen to our recordings here.
While talking with SAP, we covered the gamut of issues related to reshoring.
- Momentum already underway pre-COVID – the Amazon Effect, the decreasing importance of labor cost, the increasing importance of technology, the impact of trade wars and ability to reduce risk in your supply chain.
- The turning point from talk to action – COVID has pushed us over the edge from “all talk” to tangible steps forward. Proactive clients were already moving from China to Vietnam (for labor intensive products), India (also for labor intensive products), Mexico (to gain a customer edge for higher labor intensity products) and the U.S. for a superior customer experience and rapid customization. COVID has made everyone stop and think.
- What’s involved in moving? – It isn’t a ‘no-brainer’ to pick up from China and simply move to the U.S. You have to consider your assets a sunk cost (largely) although hopefully you have sales in the Asia region to allow for a ramp down. Depending on whether you are going to partner, have a manufacturing base to expand or are building from scratch, there are vastly different plans that must be put in place. Talent, suppliers, infrastructure, local regulations and much more must be considered.
Read more about these types of topics in my eBook, Future-Proofing Manufacturing & Supply Chain Post COVID-19. Gain ideas and strategies to successfully emerging from coronavirus and thrive long-term. If you are interested in doing an assessment and rapid roadmap tailored to your company, please contact us about this new service offering.
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