Location, Location, Location – Is re-shoring the new trend?
As noted in a recent blog post, companies have been contemplating the idea of moving their manufacturing from China back to home territories, and re-shoring.
In line with the growing trend, in March this year, British noodle Manufacturer Golden Wonder, announced it would be moving its production from China to the UK. More British companies seem likely to follow suit.
The latest news comes from a recent survey of 1,124 UK firms, conducted by Versapak. They reported that 67% of respondents admitted that they would make enquiries into bringing manufacturing from China, back to the UK or Europe. A further two fifths of the companies surveyed said they were already in talks, in regards to transferring production back to home-soil.
When asked for the reasoning behind the move back home, 48 percent of respondents said both difficulties in communication and price increases were the biggest problem areas. Long lead times were the third biggest issue.
For more information, click here.
Ignoring risk – an all too common occurrence
Recent research published by the MIT Forum for Supply Chain and PwC has revealed that about 60 percent of companies only pay “marginal attention” to reducing risk in the supply chain. Further enquiries also unveiled that only 40 per cent of businesses are investing in more progressive methods for risk mitigation.
David Simchi-Levi, the academic who founded the forum, added that companies which invest in supply chain flexibility are more resilient to disruption, compared with companies that only invest in protective methods.
MIT additionally developed five key principles, in response to their findings. To read how companies should more successfully mitigate risks in their supply chain, click here.
¿¡Viva la revolución…!?
For a number of years, Mexico has extracted huge amounts of oil from its shallow waters in the Southern Gulf with relative ease. Those lucrative supplies are however soon set to run out. To complicate matters, Petróleos Mexicanos, or PEMEX, the state-owned oil company lacks both the technical expertise and resources to even explore the much harder to reach deposits, found in the deep waters of the Gulf of Mexico; let alone extract the oil found there.
With Mexico’s oil production falling from 3.8 million barrels to 2.9 million barrels in 2011, Mexico faces the prospect of becoming an oil importer, instead of an exporter by 2020.
In an interesting turn of events, Mexico’s president Enrique Peña Nieto, hopes to implement revolutionary constitutional reforms, to solve the supply chain issue. The president seeks to allow foreign companies to invest in the state-owned PEMEX, to increase Mexico’s oil production. These foreign companies can then explore and produce petroleum in conjunction with the Mexican government and its oil company. They will then be paid a comparable amount in cash, for the oil they produce.
The proposed reforms are not without controversy. The nationalized Mexican oil industry was for years seen as a proud symbol of economic independence. Furthermore, Mexican law forbids American companies from sharing in the profits of the oil they produce.
To read more, click here.
Have a great weekend!
