Today’s Supply Chain Landscape
Attracted to cheap labor and low production costs, American companies began moving operations from the US to China in the 1990’s. Today, China’s developing economy provides attractive end market opportunities, but with increasingly unpredictable regulatory crackdowns, supply chain disruptions and rising costs, companies are rethinking this strategy. An increasing number of our clients are asking for help considering a “nearshoring” approach to their operations, with the goal of reducing lead times and uncertainty. So how should companies conduct an assessment?
Align on Evaluation Criteria
Begin by articulating the desired outcomes of nearshoring. Understanding the motivation to move will help inform the requirements to consider when evaluating possible locations. Consider goals and tradeoffs, including:
-
- Is the goal to reduce costs?
- Reduce delivery times?
- Reduce geopolitical risks or regulatory burdens?
For example, labor costs might be higher in one country, but the infrastructure may offer improvement over the current location. Is it acceptable that costs increase to reduce those risks? Socialize the initial list with other executives to understand their perspectives and achieve their buy-in to begin the investigation. These initial discussions will help capture requirements and insights to the eventual evaluation process.
Prioritize the Decision Criteria
About Pete Beckwith
Pete is a partner with Fisher, and he leads its Supply Chain Solutions Practice. He began his career at Andersen Consulting and later joined Arthur Andersen’s Business Consulting Practice, where he led Supply Chain solutions for Central Ohio. After Andersen, Pete was the Director of Business Integration and IT Strategy at Cardinal Health, a Fortune 20 company in the global healthcare distribution industry. He later served multiple executive roles at Cardinal Health, including as VP within Merger Integration and Operational Excellence, until he joined Fisher in 2015.
Pete has successfully delivered large domestic and international supply chain projects. His areas of expertise include supply chain management, business integration, Lean Six Sigma, and continuous improvement.
You can reach Pete at pete.beckwith@fishermp.com.