Skip navigation
2013

     In an interesting turn, two industry giants have both recently announced a departure from their old ways. In announcing their news, both Boeing and Apple said the changes will improve their supply chain balance.

 

     First, Boeing announced it’s establishing new centers for engineering design, propulsion, and out-of-production airplane support for Commercial Airplanes as it continues to lay the foundation to increase competitiveness and profitable growth in its second century. The company, which marks its 100-year anniversary in 2016, will establish engineering design centers in Washington state, South Carolina, and Southern California. These centers will operate independently but cooperatively with one another and with the existing Commercial Airplanes engineering design center in Moscow, Russia.

 

     The new Southern California engineering design center will now be home to engineering support for out-of-production airplanes. Boeing’s Southern California engineering team in Long Beach is already the center for support to heritage McDonnell Douglas airplanes.

 

     “We will leverage the new Southern California design center to create a single location for out-of-production airplane support, enabling us to streamline processes and develop common practices,” says Lynne Thompson, vice president of Boeing Customer Support.

 

     Creating the new centers helps Boeing be more competitive by building on its talent and capability—across Boeing, the U.S., and around the world, says Mike Delaney, Boeing Commercial Airplanes vice president of Engineering. With these changes, Boeing is structuring its engineering operations to support growth, reduce business risks, and consistently provide the products and services its customers expect, he explains.

 

     Those changes have been some time in the making. The Seatle Times reports that in an internal note to employees, Delaney explained that company leaders began mapping out a strategy three years ago that calls for Boeing to become a larger, more globally competitive company with expanded production capacity and a more geographically diverse manufacturing and engineering footprint. The memo further explained that in addition to using Boeing engineering capability more strategically across the company and providing greater geographic distribution of work within Boeing, the centers will also enhance Boeing’s ability to attract, develop, and retain a talented engineering workforce by opening career paths in multiple locations.

 

     The other company making a significant change is Apple. For years, nearly all of its iPhones and iPads were produced by Foxconn. However, as The Wall Street Journal and others have reported, Apple will begin using a second key supplier as well to deliver greater supply-chain balance. That company, Pegatron—which was a minor producer of iPhones in 2011 and later began making iPad Mini tablet computers—will be the primary assembler of a low-cost iPhone expected to be offered later this year

 

     People familiar with the matter point to strategic reasons for the shift: risk diversification after Foxconn’s manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings, as well as Apple’s decision to expand its product lines amid growing competition from Samsung Electronics Co. and others, the Wall Street Journal reports. It also doesn’t hurt that some analysts note that Pegatron has been willing to accept thinner profits as it courts Apple’s business.

 

     Foxconn, continuing to grow as the world’s largest electronics contract company, was also getting more difficult for Apple to control, with incidents such as changing component sourcing without notifying Apple, the Wall Street Journal article reports. At the same time, Foxconn became frustrated with the growing complexity of Apple products, such as the iPhone 5, which is difficult to make in the volumes Apple needed.

 

     What about your company? Are there any plans underway to change any key strategies?

     Malaria is estimated to kill more than 600,000 people globally each year, mostly women and children. Making matters worse is that in Uganda and Tanzania, two of the countries worst-plagued by the disease, counterfeit malaria medicine is widely available. The problem is that when people take these fake pills, the parasite continues to live and the people remain sick. Even more troubling is that if the drugs contain half-strength of partial active ingredients, the parasite may potentially become resistant to legitimate treatment, therefore making malaria tougher to treat even with authentic medicines.

 

     An article that ran in The Guardian last winter explained that fake packaging looks extremely authentic. It’s only on closer exam that well-trained inspectors may notice a missing watermark or that the edges of a tablet are crumbling. Even doctors have been fooled.

 

     “I have taken them myself,” says Dr. Mechtlida Luhaga, who has been both doctor and malaria patient in Africa, in the article. “I took Alu and nothing happened. I had another blood test to recheck and still had the same parasites. The drugs were fake.”

 

     To address the threat of drug resistance, limited availability of medication, and increased distribution of counterfeit or substandard anti-malarial medicines, The U.S. Food and Drug Administration recently announced a public-private partnership to help identify counterfeit or substandard anti-malarial medicines, including falsified products, using the FDA-developed Counterfeit Detection Device, called CD-3. The partners include the Skoll Global Threats Fund, the U.S.
Pharmacopeia
(USP), the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and the multi-agency President’s Malaria Initiative (PMI)—led by the U.S. Agency for International Development (USAID). The testing will take place in in Africa and parts of Southeast Asia, where the rates of malaria infection are high and where counterfeit anti-malarial medicines are prevalent.

 

     The CD-3 is a handheld, battery-operated device that illuminates a product using a variety of wavelengths of light to provide a visual comparison of an unverified product with an authentic sample. This allows inspectors to identify suspect products and remove them from the supply chain, according to FDA. Minimal scientific or technical background is needed to operate the tool, and it can be used even in remote communities or in places with only very basic health care systems.

 

     The effectiveness of the tool in detecting counterfeit or substandard versions of two common anti-malarial therapies will be tested in Ghana in 2013 and 2014. The USP Promoting the Quality of Medicines Program (PQM), with funds from USAID and PMI, collaborates with the Ghanaian Food and Drug Authority to conduct drug surveillance programs at test sites in Ghana, and the new partnership will leverage this existing infrastructure.

 

     One question that early tests will explore is how effectively the device can distinguish between legitimate medications and substandard versions. If the devices are found effective, and can be mass-produced inexpensively, their use could limit the profitable worldwide business in counterfeit drugs.

 

     There are still challenges to work out, however. For instance, The Guardian article notes that in Uganda, where the market is perhaps even more saturated with counterfeit medicines making their way across borders into less regulated markets such as the Democratic Republic of the Congo, the situation at times seems hopeless. At Busia, a major border crossing with Kenya, trucks are lined up for hours, or even days, awaiting inspection.

 

     “We have a big problem with all these dangerous and toxic goods so we must what? Test everything?” says Robert Kamchu, the head of the border police, in the article.

 

     Nevertheless, technology with the capability to determine whether drugs are real or counterfeit in the field is exciting. More importantly, it may help save lives. So I’m hoping it’s a huge success. I’m also looking forward to learning about lessons learned, and whether CD-3 can be used to identify other counterfeit medicines in other markets.

     The U.S. has recently accused Iran of orchestrating a number of cyber-attacks against U.S. energy companies, which officials have described as worrying. The Iranian hackers were able to infiltrate the computers behind oil and gas pipelines—in addition to electricity grids—gaining access to control systems and conducting surveillance missions, according to The Wall Street Journal.

 

     Unfortunately, that doesn’t really come as a surprise. Not after reports earlier this year that  a clandestine Chinese military unit has conducted sophisticated cyber espionage operations against dozens of American and Canadian companies. According to a private report by computer security firm Mandiant Corp., attacks against 141 companies have been traced to a specific 12-story office building in the financial center of Shanghai. According to the report, the building is home to the 2nd Bureau of the People’s Liberation Army’s General Staff Department’s 3rd Department, which is known as Unit 61398.

 

     While the group, known as Comment Crew, has drained terabytes of data from companies such as Coca-Cola, increasingly its focus has been on companies involved in the critical infrastructure of the U.S.— its electrical power grid, gas lines, and waterworks. What most worries American investigators is that the attacks believed coming from Unit 61398 focus not just on stealing information, but on obtaining the ability to manipulate American critical infrastructure.

 

     President Obama has gone so far as to say the “cyber threat is one of the most serious economic and national security challenges we face as a nation.” He also added that “America’s economic prosperity in the 21st century will depend on cybersecurity.”

 

     The challenge though is that today’s sophisticated global supply chains require companies to exchange sensitive information with multiple partners, some of whom are several tiers removed from the manufacturer. So as a supply chain becomes more extended, it also simultaneously becomes more vulnerable. In the end, some companies end up with a so-called “black hole” of undefined information risk.

 

     The question then becomes, how can companies become proactive to reduce the opportunities for attack? An interesting SupplyChainBrain article notes that in a paper for CSIS, cybersecurity expert James A. Lewis writes that companies need to adopt “a minimum standard of due care” in their cyber-security programs. As a guide for action, he cites work by the Australian government’s Defense Signals Directorate (DSD) and the U.S. National Security Agency (NSA). DSD has come up with a list of 35 recommended mitigation strategies, while NSA lists 20 “critical controls.”

 

     For companies looking to tighten their cyber-security measures, the first four of DSD’s recommendations provide an excellent start. They are:

 

  • Use application whitelisting to restrict company computers and networks only to those programs that are specifically approved by the company.
  • Download patch applications that correct the vulnerabilities in such programs as Microsoft Office, Adobe Flash, Java, and various Web browsers.
  • Accept patches to plug vulnerabilities in operating systems such as Windows, which has long been notorious for its exposure to hackers.
  • Place tight controls on administrative privileges. Keep to an absolute minimum the number of individuals who are authorized to make changes on the company’s network.

 

     According to DSD, those four strategies will help to protect organizations from “low to moderately sophisticated” intrusion attempts. In fact, the agency says, they can ward off more than 85 percent of cyber intrusions. That’s not a complete solution, and unfortunately for most companies, there isn’t a complete system that can protect against all types of attacks. But it is proactive, and certainly is thorough. Furthermore, it’s a great deal more than most companies already have.

 

     What about your company? How secure is it against cyber-attack?

     Two major disasters in 2011 showed the vulnerability of many organization’s supply chains. The earthquake and tsunami in Japan followed later that year by the flooding in Thailand cast a spotlight on strategies such as sole sourcing and eliminating surplus inventory.

 

     The electronics supply chain was significantly affected because although Japan is a major global supplier of chips, flat-panel displays, and other components used in devices like computers, tablets, digital cameras, Blu-ray players, and televisions, it also is a major exporter of consumer electronics—and the exporting ground to a halt. At the same time, there were numerous setbacks for the auto industry, not only because Japanese automakers were forced to halt vehicle production but also because Japanese suppliers produce many of the electronics and other components used in today’s vehicles—and again, they were forced to stop production.

 

     Later that year, Thailand experienced the worst flooding the country has seen in more than 50 years. The problem is that Thailand has become a major production and export hub for global auto makers, and the flooding damaged several key industrial areas that are home to a large number of international auto component suppliers as well as other export-oriented factories. Many of those companies were forced to suspend production, which in turn, forced companies to reduce production at their North America plants by 50 percent because the suppliers in Thailand were unable to deliver parts.

 

     The worldwide repercussions of the catastrophes show the global and interconnected nature of the electronics and auto industries, and the impact of the disasters were felt throughout the materials, components, and equipment segments of the supply chain. Indeed, an article  from Lloyd’s, the specialist insurance market, notes that according to Swiss Re Sigma, the combined property and business interruption losses from the events reached a record-breaking $240bn, with just $47bn of the losses covered by insurance. The most highly impacted industries of course were electronics, semiconductors, and key parts in automotive production.

 

     However, despite the devastation caused by the earthquake and the tsunami, one of the key characteristics in the aftermath of the tsunami in Japan was on-damage business interruption. So as the Lloyd’s article explains, factories that had escaped the worst of the magnitude 9.0 quake were prevented from operating normally by power outages or the inability to move workers in and out of the facility. Furthermore, the level seven meltdowns at the Fukushima reactor, which was flooded by the tsunami, compounded the disruption to businesses in Japan and the supply chains they serve.

 

     Tom Teixeira, a partner in the global solutions consulting group at Willis, explains in the Lloyds article that that many of the non-damage losses weren’t insured. There were a number of companies that thought they had insurance cover in place for supply-chain interruption—known as CBI—but that only came into effect if there was property damage at the supplier side. If it was a case of workers not being able to enter a site or there was no power reaching the supplier’s site, there was no cover and these companies faced a considerable loss, he says.

 

     Since 2011, however, there are growing signs that global supply chains are becoming more resilient, although there is still room for improvement, says Teixeira. One big challenge for many companies has been to improve communications between the procurement and risk management departments. Relying on sole suppliers and using just-in-time manufacturing techniques may help keep costs down but they also increases supply chain vulnerability. Choosing to locate manufacturing sites in a region prone to flooding because the country offers cheap labor and low overheads can also potentially be a critical mistake.

 

     Nevertheless, certain companies in certain sectors are getting their act together, Teixeira says. In some instances, for example, up to 80 percent of the key suppliers for major electronics manufacturers are now dual-sourced, he notes.

 

     What about your company and supply chain? Have your company made changes and strengthened its supply chain this year?

    Whether companies are considering re-shoring or simply striving to improve operations, the subject of talent shortages continues to come up.

 

     So, for instance, many U.S. manufacturers are experiencing talent shortages due, in part, to an aging baby boomer generation that has begun to leave the U.S. workforce. The oldest baby boomers turned 65 on Jan. 1, 2011, and every day after that for about the next 19 years, some 10,000 more will reach the traditional retirement age, according to the Pew Research Center.

 

    That’s certainly a concern but an equal, and perhaps larger, concern is what many perceive as a lack of interest by young people in manufacturing as a career. So while older workers are leaving, there aren’t enough younger workers entering the industry to replace them and their knowledge.

 

“Very few students in school aspire to work in manufacturing,” Pete Selleck, president and chairman of Michelin North America, said during a keynote address at the recent IndustryWeek Best Plants conference, IndustryWeek reported in a recent article. As evidence, Selleck pointed to a curriculum development process employed in South Carolina—where the tire manufacturer’s North American headquarters is located—in which students at a certain age begin to identify the career “clusters” that interest them. Manufacturing ranked 14th of 16 choices.

 

     Michelin’s efforts to encourage youth to consider a manufacturing career include working to bring teachers and middle school students into its manufacturing plants, the article explains. The company wants to dispel the notion, which is still held by many, that manufacturing plants today remain the dirty, harsh environments they were 50 years ago, Selleck says.

 

     “We've got to not only get [young people] interested, but then we have to put our young production folks, our young maintenance folks, our young engineers, our young business unit leaders in front of those 14 year olds and explain to them how they got to where they are 10 years later,” Selleck says in the article. “Explain to them the choices that they made, the things that they chose not to do in order to make sure they had a chance to get to these very, very lucrative jobs.”

 

     Young people aren’t the only ones missing in today’s manufacturing industry. I was interested to see that the Manufacturing Institute is partnering with Deloitte, University of Phoenix, and the Society of Manufacturing Engineers on the STEP Ahead initiative (women in Science, Technology, Engineering, and Production), which was launched to examine and promote the role of women in the manufacturing industry through recognition, research, and education/leadership.

 

The institute notes that while there is an acknowledged talent shortfall in the U.S., the manufacturing industry hasn’t mined one obvious talent pool—women. Manufacturing Institute launched a formal research initiative with Deloitte to better understand why manufacturing isn’t attracting its fair share of talented women, as well as to offer best practices for how manufacturers can attract, retain, and advance female talent.

 

     The study found that women represent manufacturing’s largest pool of untapped talent. Women represent nearly half (46.6 percent) of the total U.S. labor force and earn more than half of the associate’s, bachelor’s, and master’s degrees in the U.S. However, they only comprise a quarter (24.8 percent) of the durable goods manufacturing workforce. The proportion of women in leadership roles in manufacturing companies also lags behind other U.S. industries.

 

     To meet the industry’s long-term talent requirements, the study found that manufacturing clearly needs to do a better job to attract, retain, and advance its fair share of talented women. To do so, survey participants recommended that companies actively support school initiatives that increase young women’s interest in obtaining a technical education. They also note that it’s vital for manufacturers to fight the image that manufacturing is a dying industry with a bias against women, and actively promote the “high-tech, innovative, rewarding careers that constitute manufacturing today.”

 

     What do you think? Is your company working to recruit younger employees in general, and women specifically?

     Drugmaker Pfizer announced it will begin selling its popular erectile dysfunction pill Viagra directly to patients via a new website. An Associated Press story I saw on The Washington Post reports that in what is a first for the drug industry, men will need a prescription to buy the blue pills on the site but they no longer have to face a pharmacist to get their prescription filled. The site also includes offers for free pills with the first order.

 

    The prescription-fulfillment website, known as Viagra home delivery, is powered by CVS/pharmacy. CVS/pharmacy will handle all of the back-end functions, including the authentication of all prescriptions, explains an article that ran on Businesswire. Furthermore, its on-line pharmacy, CVS.com, has received accreditation from the National Association of Boards of Pharmacy’s (NABP) VIPPS (Verified Internet Pharmacy Practice Sites) program.

 

     That’s important because it demonstrates the website can be trusted. After a recent review of more than 10,000 Internet outlets selling prescription drugs, NABP listed almost 97 percent of the sites as “Not Recommended” because they did not appear to meet criteria for legitimate on-line pharmacies.

 

     Experts say the fake drugs such websites sell can be dangerous. That’s because they don’t include the right amount—if any—of the active ingredient and sometimes they also contain toxic substances such as heavy metals and lead paint. They typically are illegally produced in dirty warehouses and garages in Asia, Eastern Europe, and Latin America.

 

     “We have seen counterfeit medicines manufactured in filthy and deplorable conditions, yet some people don’t realize the risks this poses to their health and safety, our top priority,” said Matthew Bassiur, vice president, Pfizer Global Security. “Counterfeit medicines often contain the wrong or incorrect levels of active ingredient, as well as potentially dangerous contaminants. Samples of counterfeit Viagra tested by our labs have contained pesticides, wallboard, commercial paint, and printer ink. These findings motivate us to continue our aggressive global efforts to stop those who prey on unsuspecting patients.”

 

     Counterfeit Viagra not only is hazardous to consumers’ health, it also robs Pfizer of millions of dollars of income annually—it’s the most counterfeited drug in the U.S., according to the company. The illegal on-line pharmacies explain their ultra-low Viagra prices, generally $1 to $3 a pill, by claiming they sell generic Viagra. The problem is, there is no such thing as generic Viagra. Pfizer has patents giving it the exclusive right to sell Viagra until 2020 in the U.S. and for many years in other countries.

 

     One of the interesting implications of the announcement is that it essentially turns the pharmaceutical industry’s distribution model on its ear. Drugmakers don’t sell medicines directly to patients. Instead, they sell in bulk to wholesalers, who then distribute the drugs to pharmacies, hospitals, and doctors’ offices. In this case, Pfizer will be selling directly to consumers (via CVS/pharmacy) which leaves lots of other folks out of the process.

 

     Consequently, other major drugmakers will be watching Pfizer’s move closely. If it meets with success, expect other drugmakers to begin direct selling their medicines that are rampantly counterfeited and sold on-line. There’s also an embarrassment factor here, so if the Viagra distribution model does prove successful, other drugs for conditions that may be seen as embarrassing will be likely candidates because purchasing them on-line eliminates a face-to-face meeting with a pharmacist.

 

     “If it works, everybody will hop on the train,” says Les Funtleyder, a health care strategist at private equity fund Poliwogg, in The Washington Post article. He also adds that he believes Pfizer’s site will attract “fence-sitters” who are nervous about buying on-line from potentially unscrupulous websites.

 

     So all in all, I think this is a shrewd move by Pfizer. The growth of counterfeit and illegal medical products sold by illegal pharmacy websites is an international problem that puts consumers’ health at risk. At the same time, being able to have a Viagra prescription filled via a certified on-line pharmacy without having to actually visit a pharmacist in-person may actually increase sales.

 

     What do you think?

     Sometimes disasters can be anticipated and sometimes they catch everyone by surprise. So, like many others, I was surprised to see the National Weather Service issue flash flood warnings for the entire Chicago area just over two weeks ago. On April 18th, between three and seven inches of rain fell throughout the area in less than 24 hours, and the resulting flooding closed parts of all four major expressways in and out of the city that morning. Many arterial streets and highway ramps remained blocked Thursday afternoon, delaying commuter trains for hours, flooding residential and businesses’ basements, and closing schools. O’Hare International Airport reported 600 flight cancellations Thursday afternoon. The situation got so bad that local and state police recommended that people stay off the streets and highways, and Illinois Governor Pat Quinn declared a state of emergency for Illinois.

 

     With images of the extensive flooding on my mind, it’s probably not surprising that the cover of the May issue of Journal of Accountancy, a publication of the American Institute of CPAs, immediately caught my eye. Its cover story addresses issues CPA firms should be prepared to face if they are hit with a disaster that disrupts their business. However, I believe the article also offers some good advice for all businesses—namely that disasters can happen anywhere at any time, and the most important preparation is to understand that even the best disaster-recovery plans won’t work exactly as envisioned. Actually, I believe the most important thing is to plan and practice for disasters before they happen. But yes, I also agree they seldom play out exactly as planned.

 

     The next step, after creating a disaster-response plan, is to communicate it to employees, and then conduct drills. It’s important for employees to know where they should go and what they should do in the event of a disaster that occurs during business hours. The second step is to train employees on what to do before, during, and after a major event that disrupts business.

 

     In the event of a disaster that impacts day-to-day life for employees and their communities, firms should focus on addressing the human needs of their staff. Large-scale destruction and suffering can lead to mental health and other issues for employees. For instance, one executive in the Journal of Accountancy article explained that all employees either were impacted directly by Hurricane Sandy last fall or they knew someone dealing with damage inflicted by the storm. That’s why it’s essential to ensure that employees have access to money, insurance, mental health care, and other support programs.

 

     While the human aspect comes first in the recovery process, firms also must find a way to stay viable as businesses in the aftermath of a disaster. As the article notes, firms are well-advised to have business interruption insurance, which is structured to compensate businesses for periods when they are unable to operate because of disaster.

 

     There are a host of issues to address and questions to ask. So, for example, how often are files backed up? Are those backups stored off-site? If a physical site is damaged, is an alternate site already set-up as a back-up site? How difficult is it to transfer operations to other sites?

 

     Then there’s communication, which is a vital aspect to disaster response but isn’t guaranteed. The Journal of Accountancy article explains that in addition to damaging buildings themselves, Hurricane Sandy, also known as Superstorm Sandy, knocked out 25 percent of the cellphone towers in a 10-state region. This wreaked havoc on companies’ post-disaster communication strategies that relied on phone trees in which employees would call other employees via their cellphones.

 

     As the article further notes, companies in New Orleans encountered significant communication challenges when the city’s levee system failed after Hurricane Katrina in 2005. Floodwaters reached the rooftops in 80 percent of the city, resulting in more than 1,800 deaths. With employees displaced and cellphone towers in the flood zone inoperable, communication was near impossible.

 

     I’m curious, does your company have a business continuity plan that identifies the activities/people that are critical to running the business, and ensures that they are protected? In other words, is your company prepared for a disaster?

     Do you think the decision to near-shore production is growing in importance? I ask because according to the results of a new survey, 84 percent of the respondents said the decision to near-shore is very important or somewhat important—that’s up from 53 percent of the respondents last year. When asked why near-shoring decisions are so important, 49 percent of the respondents said they see it as an opportunity for their companies to meet U.S. demand.

 

     “AlixPartners Manufacturing-Sourcing Outlook,” the result of a survey of 137 C-level manufacturing-company executives and an economic and cost analysis conducted by AlixPartners, found that 37 percent of manufacturing executives said they would choose the U.S. as their preferred location for near-shoring (defined as moving production of products closer to the U.S. consumer base). An equal percentage of respondents cited Mexico as the most attractive near-shoring locale.

 

     The reason for near-shoring is to be expected. Approximately 58 percent of the survey respondents said that for production that has either already been near-shored or is being considered for near-shoring, they have either reduced or expect to reduce their total “landed cost” by five percent to 20 percent. Those cost savings are expected to come from a wide variety of sources, with the most-attractive potential advantages being lower freight costs and improved speed-to-market/lower inventory or in-transit costs.

 

     If trends that include China’s rising production costs, current exchange rates, and the cost of transporting goods continue, AlixPartners expects that by 2015, the cost of importing manufactured products from China will be about the same as manufacturing them in the U.S. However, other key low-cost countries such as Mexico and India will remain highly competitive. Mexico, in particular, offers an increasingly compelling case for a near-shoring location.

 

     Even so, the U.S. is definitely a more cost-competitive source for manufacturing today than it has been for many years, says Steve Maurer, managing director at AlixPartners and leader of the firm’s Manufacturing Practice in the Americas.

 

    However, while AlixPartners’ research found that some goods can indeed be manufactured at an equal or lower cost in Mexico than in China, many other types of products cannot. This proves that there is no easy answer and many factors must therefore be carefully analyzed and weighed before near-shoring or re-shoring takes place. For example, AlixPartners found that while the “China cost” for items such as machined aluminum parts, plastic molded parts, non-denim slacks, and knit apparel and sweaters is indeed on the rise, that cost is still lower than Mexico’s in each case—and the cost is forecast to remain lower through at least 2015.

 

     Furthermore, despite China’s increasing landed cost trends, the country maintains a labor and plant/equipment capacity—not to mention scale—that is unique. It also has an aggressive industrial policy, with emphasis placed on training and incentives for investment, AlixPartners reports. The U.S., meanwhile, has certain specific constraints that could limit re-shoring. There are, for instance, often substantial costs of switching manufacturing locations, as well as current shortages in the U.S. of foundational manufacturing assets and both manufacturing workers and management.

 

    So, as has been previously mentioned, there are numerous issues to evaluate when assessing competitiveness for business, with a primary focus on business costs. Then again, a number of crucial factors must likewise be considered, including population and demographics, education and skilled labor, innovation, infrastructure, economic conditions, regulatory environment, cost of living, and personal quality of life.

 

     The best advice I’ve heard lately regarding near-shoring comes from Foster Finley, managing director at AlixPartners and leader of the firm’s Supply Chain Practice in the Americas. “When it comes to moving production, companies should look twice before they leap,” he says.