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Headed Home: The Role of Proximity in On Shoring

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nimantha.d
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Re: Reshoring and Proximity to Customers
nimantha.d   4/29/2014 2:15:02 AM
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@ananadvy: Yes indeed that is an advantage they have but many do sell their shares because of the financial instability. 

anandvy
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Re: Reshoring and Proximity to Customers
anandvy   4/28/2014 2:51:05 PM
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@Reshore Now: Nice insight into the companies' problems in re-shoring after off-shoring. What you said was frightening, that re-shoring of only 25% of off-shored company would mean people losing jobs and benefits. Total cost of ownership will help companies decide at what point of market stability re-shoring would actually prove healthy, without people having to lose so many jobs.

anandvy
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Re : Headed Home: The Role of Proximity in On Shoring
anandvy   4/28/2014 2:50:14 PM
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Proximity to customers will see an increase to regional sales, because of all the after sales support customers will be getting after buying a new product. But what does a company do when their parent country has too many competitive companies and they are giving the product at a faster rate with better benefits? The company that has its roots grounded in a place would be losing their customers in their parent land! Suppose Hewlett-Packard has decided that Asia is the fastest growing market sector with the highest influx of Hp products in the area, so they move in Asia. However, in their homeland, Intel gives customers more benefits than what HP gives, therefore, although it has an Asian stronghold, it loses the customers in USA, their parent country.

Eldredge
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Re: Reshoring and Proximity to Customers
Eldredge   4/24/2014 9:07:42 PM
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@Reshore Now - I have always thought that lost IP is one of the most significant, unaccounted off-shoring costs. In fact, I think that acquisition of IP is one of the primary reasons that other countries have promoted themselves so aggressively.

Hospice_Houngbo
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Re: Reshoring and Proximity to Customers
Hospice_Houngbo   4/23/2014 11:45:09 PM
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Sometimes offshoring may be inevitable especially when the company doesn't have the talents to implement in-house solutions.

Reshore Now
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Re: Reshoring and Proximity to Customers
Reshore Now   4/22/2014 9:58:01 PM
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Thanks Hailey for your interest in the Reshoring Initiative www.ReshoreNow.org

I believe the miscalculation came from a couple of angles. First, there was a kind of herd mentality that when companies saw their competition offshoring, they felt they would have to offshore as well, in order to remain competitive. However, many times this was not the case.

Also, many times they were considering only the labor costs and ignoring the 29 other costs that need to be considered in order to get the total cost.

Plus, the companies were not considering all of the hidden costs of offshoring such as intellectual property risks, long unstable supply chains, loss of innovation etc.

Hailey Lynne McKeefry
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Re: Reshoring and Proximity to Customers
Hailey Lynne McKeefry   4/22/2014 7:42:40 PM
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@Reshore now, thanks for the link to the calculator. I'm interested in teh high number of miscalculations. What do you think is responsible for the majority being mistaken? Were there costs and elements of the calculation that were often missed? Or were there miscalculations on how expensive? I'd be interested in your take on what's behind the huge gap between the calculations and reality...

Reshore Now
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Reshoring and Proximity to Customers
Reshore Now   4/22/2014 12:13:54 PM
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Many companies are reshoring because they are finding that having manufacturing near customers gives them better flexibility to respond to customers changing needs, eliminates higher shipping expense, minimizes supply chain disruptions and eliminates the larger production runs and inventories associated with long distance offshoring.

Companies are also finding that when manufacturing is moved next to engineering, they can improve design, eliminate waste, improve quality and increase productivity.

In the past, as many as 60% of companies made the decision to offshore based on miscalculations, never taking into consideration the total cost of ownership (TCO) including all of the hidden costs and risks of offshoring.

Current research shows many companies can reshore about 25% of what they have offshored and improve their profitability simply by using TCO (total cost) instead of price to make their decision.

25% is equal to 1 million jobs!

In order to help companies decide objectively to reshore or offshore, the not-for-profit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm





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