Supply Chains: Take Another Look
Posted on April 17th, 2017

“In 2004, the cost of manufacturing on the east coast of China was approximately 15 percentage points cheaper, on average, than in the United States. In 2016, that gap was down to about 1 percentage point.” That’s one reason why Justin Rose and Martin Reeves of the Boston Consulting Group argue that U.S. companies should rethink their supply chains. Other factors include cheaper energy prices in North America, the complexity of managing global supply chains, and the possibility of a U.S. border tax or other forms of protectionism taking hold.
But companies can’t assume they will find the materials or manufacturing capacity they need in the United States. American manufacturing has been in decline: a net 19,000 U.S. manufacturing companies closed shop between 2001 and 2015, Rose and Reeves point out in their Harvard Business Review article. Their best advice is for companies to evaluate their current and future customer footprint and map it against existing manufacturing and supply chain capabilities, and then evaluate alternate scenarios.
To read the full article, click here.

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