The Short Sale Essay

2075 WordsAug 10, 20129 Pages
Near-sourcing trends create new winners and losers in the supply chain. Benjamin Gordon is founder and Managing Director or BG Strategic Advisors, www.BGSA.com, and can be reached at Ben@BGSA.com. Karen Rutt is an Associate for BG Strategic Advisors. In the 1970s, deregulation spawned a new era of growth in transportation. Nimble trucking companies like Schneider and J.B. Hunt capitalized on this opening to become multi-billion-dollar giants. In the 1990s, the demand for outsourcing produced a new category of winners, known as 3PLs. Logistics firms like CH Robinson and Expeditors became major beneficiaries. Today, we are on the precipice of the third major change to sweep through the supply chain. Like its predecessors, it has the potential to create new classes of winners and losers. The name of this powerful new trend? Near-sourcing. The move toward near-sourcing is underway. Car manufacturer Tesla Motors just canceled plans to manufacture its 1,000-pound batteries in Thailand as previously planned. By manufacturing them closer to Tesla's home base in California, it will decrease the shipping distance of each battery approximately 5,000 miles. Other major manufacturers are following suit. Also called "reverse globalization" or "shortening the supply chain," near-sourcing describes the return of American manufacturing in order to decrease shipping expenses. As freight costs remain high, globalization has become less competitive and is expected to remain so for the foreseeable future. We will share why near-sourcing is happening, discuss implications for the supply chain industry, and conclude by offering ideas to supply chain business owners to ensure their success amidst change. Near-Sourcing: Requiem for Globalization? Historically, cheap gas fueled globalization. It enabled companies from all over the world to shop globally for cost-saving business

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