The falling dollar, high fuel and energy prices, and rising labor costs in traditionally low-wage markets have some manufacturers rethinking how far they’re willing to extend their supply chains. Over the past year, a handful of companies have publicly acknowledged that cost pressures factored into their decisions to move production back home.
Depending on the situation, the changing economic climate could make the United States the ideal sourcing country for domestic manufacturers, says Tom Jones, senior vice president and general manager of U.S. Supply Chain Solutions for logistics provider Ryder System Inc. “It really depends on the industry and the cost of the product, the value of what you’re shipping and the characteristics,” he says. “You can ship a box full of microprocessor chips quite a long ways without a significant penalty on the shipping side, but if you’re shipping diapers a long way, which are very bulky, and the cost of transportation is high, you’re not going to get what you want with that.”
Source: IndustryWeek
Tell Us What You Think!