Oracle Supply Chain Management Blog

Global Supply Chains are High Risk? Time to Bring Production Closer to Home Markets!

March 2, 2012 By: Stephen Slade

Each week it seems like supply chains become battered with new turmoil or unrest - from political risk, to natural disasters and disruptions in the natural flow of goods to markets. Considering it takes 4-8 weeks for products to cross the oceans, organizations are paying attention to the various categories of risk being imposed on their supply chains. David Simchi-Levi, Professor at MIT, writes in the HBR blog (Feb.27'12) about these exposures, that firms are looking to bring back production from overseas to native and consumer markets. He mentions a few organizations that have taken steps to restore American production as:

  • Ford - moving jobs back to the USA from China and Mexico
  • Caterpillar - investing $120M in a new plant in Victoria Texas to produce excavators

David talks of an 'Genuine Transformational Period' taking place as a result of labor arbitrage and growth of offshore consumer markets. Washington is paying close attention to these shifts and looking for ways to support this trend - to bring back the manufacturing jobs.

David closes by stating that "...without a concentrated, collaborative, national effort, it will be difficult for the United States to reestablish worldwide manufacturing prominence". for more info, go to the HBR Insight Center on American Competitiveness

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