Can We Bring Manufacturing Back?

Wal-Mart is on board to try and shift the tide back to America
By Rosemary Coates, President of Blue Silk Consulting
June 03, 2013 - SCMR Editorial

I was teaching a workshop last week in Harrison, Arkansas and arrived early the day before.  With an extra few hours to kill, I decided to drive around Harrison’s main street which included lunch at the Dixie Café and a stop at Wal-Mart. 

It’s been a while since I’ve been inside a Wal-Mart store, but I am familiar with Wal-Mart’s procurement processes in China, so I decided to conduct a fun little experiment. I picked up 22 random items and looked for the Country of Origin on each item.  Of these, 19 were labeled “Made in China”, 2 were “Made in El Salvador,”, and 1 was “Made in India.”  I made an effort to find anything that was labeled “Made in the USA” and eventually found a couple of things.  I also tried to find the new 1880 towels that have been all over the news because production of these towels was reshored from China to Georgia. These towels are supposed to be carried at Wal-Mart stores.  But there weren’t any in this store.

The assortment of Chinese merchandise was astounding. Even I was surprised, knowing that 40% of the world’s goods are manufactured in China.  But to see it on the racks, on the shelves, stacked in aisles and on hangers was a real eye-opener.  We demand rock-bottom prices on the things we buy and as a result, Wal-Mart turns to low-cost producers in China, and fills its stores with Chinese merchandise. But Wal-Mart has also earmarked $50 billion to buy goods from US manufacturers over the next decade.  Wal-Mart is on board to try and shift the tide back to America.

If we truly want to bring manufacturing back to the US, we have a very long way to go.  In January, my consulting firm rolled out a new product called “Bring Manufacturing Back.”  It’s a 6-week program to help our clients evaluate what they could make in the US.  This process is not as simple as it appears.  There are so many aspects including costs, technologies, skills, localization, government incentives and others.  It is also important to evaluate what a company should keep manufacturing in China for the burgeoning Chinese market.

I sense there is a real shift in thinking as senior operations and supply chain executives take a giant step up and consider their global manufacturing strategy, not just the cheapest production environment.  It seems to me, this is the next evolution in global supply chains.



About the Author

image
Rosemary Coates
President of Blue Silk Consulting
Ms. Coates is the President of Blue Silk Consulting, a Global Supply Chain consulting firm and the author of: 42 Rules for Sourcing and Manufacturing in China. (an amazon.com Top Seller) and 42 Rules for Superior Field Service. Ms. Coates lives in Silicon Valley and has worked with over 80 clients worldwide. She is also an Expert Witness for legal cases involving global supply chain matters.

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Seasonally-adjusted (SA) for-hire truck tonnage in November was up 3.5 percent compared to October, which was up 0.5 percent over September at 136.8 (2000=100), marking the highest SA on record.

UPS said that through this acquisition it will augment its healthcare expertise and network in Europe, specifically in the fast growing healthcare markets in Central and Eastern Europe.

Carloads were up 12.1 percent at 312,271, and intermodal at 280,337 containers and trailers saw a 4.5 percent annual gain.

Total November POLB volumes were up 2.1 percent year-over-year at 581,514 TEU, and POLA volumes in November decreased 3 percent compared to November 2013 at 663,346 TEU.

When railroads are doing business with a larger than large customer like UPS, it stands to reason, it can often be the best, and worst, of both worlds, depending on how things are going. That was one of the main takeaways from a presentation by UPS Vice President of Corporate Transportation Services Ken Buenker at this year’s RailTrends conference in New York.

Article Topics

Blogs · Global · Supply Chain · Manufacturing · All topics

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.