Monday, September 23, 2013
Will companies shift away from off-shore/out-sourcing?
After reading this week’s articles on supply chain networks I was fascinated by common theme within these articles, I wasn’t aware that companies were considering moving away from out-sourcing. I was always under the impression that out-sourcing/off-shoring was the cheapest option for companies to save, minus a few companies like, Dell, which have found unique supply chains to suit their needs.
I know that over the years, IT firms especially have been moving towards moving part of their supply chain (manufacturing) to Asia to help reduce their costs. Now with the weaker dollar and rising labor costs in China, companies are starting to consider moving back to the states or other regions in the world to help combat costs. After learning this I was wondering if companies would consider utilizing the just-in-time and just-in-case methodology to minimize costs? Can companies incorporate a hybrid system of these two methodologies into their current supply chain? Also, should companies consider moving to Europe, other parts of Asia or even back to America, since the costs in China are rising?
In other news, some companies have found interesting ways to cope with rising costs of shipping/importing materials from China. Apparently, AWL Food Group, a family owned food trading company, has been caught up in a honey laundering scheme. The company tried pawning honey from China as honey from other countries to avoid paying high tariffs for shipping items from China. I think this event is a little hilarious and sad that companies have resorted to these tactics to avoid paying high tariffs.