New study recommends companies "Bring manufacturing home"
Supply chain and logistics snags may slow global sourcing boom, report says
By Dave Hannon -- Purchasing, 5/29/2007 4:53:00 PM
The cluttered supply chains between Asia and the U.S have slowed imports so much that the Boston Consulting Group is recommending that U.S. companies “Bring manufacturing home” to U.S. locations.
In a new report called Surviving the China Riptide, BCG analysts warn that: "In their rush to source from China many companies are blindly walking into a strategic trap. thinking that sourcing from China will result in lower product costs, when in reality the supply chain dynamics will, in many cases, drive up overall costs and reduce profitability."
The report concludes that logistics issues such as West Coast port congestion and European port capacity issues have made sourcing from China so difficult and costly that many companies should start considering other options. “Success depends on proving customers what they need and when they want it,” the report’s authors point out.
A list of six clearly defined strategies is provided in the report as alternatives to China sourcing.
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