----Offshore
After reading the article about Apple’s offshoring in China,
I searched for some articles about offshore. As far as we know, China is the
country which is well known for cheap labor. Numerous companies set their
manufactures in China. But today’s China is far more expensive than before. I
often heard new in China that many manufactures in China can’t find workers
because they have to pay more to workers, otherwise they can’t even hire any
workers. Then the companies have to stop operation. This is a very bad
situation. So I began to think about the advantages of offshore. The first one
is the cheap labor in the offshoring country. Second one is maybe the places are
to the raw materials. It’s also possible that the company would like to expand
their market to the offshore country. But I believe that the logistics is big
concern in offshoring. Except for this, companies also have to consider other problems,
such as inventory, currency exchange rate, and environmental regulations. As far
as I see, even in the time the labor price was still low in Asia, the benefits
of offshore are still limited. On good example is TOYOTA. TOYATA makes Corollas
in Silicon Valley, one of the most expensive places on earth to produce goods.[1]
The reason for it is that TOYOTA believes in the principle that sending goods
to customers within one day is better than shipping goods through long and
complex logistical and political boundaries in a month. TOYOTA applies other
method to attain low cost, applying lean manufacture to keep its cost least. In
summary, when considering whether manufactures should go offshore or not, they
should clearly think about that if lower labor cost is decisive to the final
total cost or not. They should also consider how quickly they can respond to
customers’ demands. They must also take into account for risk in offshore
supply chain.
----Collaboration in future supply chain
When I read the collaborative physical logistics in the
article, the future of supply chain, I began to doubt the possibility to realize
it. Then I found a research studied by McKinsey and ECR Europe, discussing the collaboration
in future supplies chain. The participants in the research represent industry
leader in 13 countries. The willingness of collaboration is not very agreeable.
And only 60% of the collaboration initiatives yield some benefits. Researchers
conclude that the reasons for failure of collaboration are insufficient
resources, lack of support from management, and resistance to share information.
But the research participants show great interest in the collaboration in
supply chain. I believe that the idea of sharing warehouse storage and
transportation vehicles sounds tempting to them. I think the collaboration in
supply chain can reduce the cost and also do benefits to environment. It will take
fully use of supply chain resources.
To attain successful collaborations, companies must first
decide who to collaborate with, what to collaborate on and how to collaborate. For
example, to collaborate with those who are more willing to collaborate is better
than to those only have larger capacity and good performance. Those who
collaborate should focus on long term rather than stick to currently interests,
otherwise they can hardly overcome initial hurdles to keep collaboration in
future. [2]
My question is supply chain in future will be in a more
uncertain, complex and risky world. How do companies establish long-term collaboration
and trust in such environment.
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