Reshoring is one of those catchy nebulous terms which emerge each year often bantered around without historical background counting on a loose association with a few quick headlines (Panama Canal running out of water) and apple pie (reduce waster) to convey an air of moral superiority. In fact, the core of reshoring is simply two strategic business decisions: (1) where to locate production facilities to create goods to meet demand in which markets, and (2) transportation options to move these goods to market. Additionally, two related tactical decisions – product starts and movement of goods. Often the strategic decisions are tied to economic policy decisions made by nations, states, and economic unions. The US made an economic policy decision to build the Panama Canal. The concept that production at a distance from markets would increase overall wealth through specialization and economies of scale has been a corner stone of economic activity since at least 1750. Clearly roots go back to the trade between east and west during the Middle Ages – with this exchange European would still be doing arithmetic with roman numerals. It is not just “send by sea”, but includes an array of travel methods: canals, rail, and roads. For example, NYS built the Erie Canal (called Clinton’s Follies). This concept with the railroads underpinned the production of meat at a distance which resulted in cheaper food, but the reduction in local meat production. As we saw with Norfolk Southern, rail carries its own risks. What is the role of supply chain analytics in location and transport decisions? It is only with a comprehensive end to end model of the demand supply network (DSN) that incorporates operations, finance, and risk management structure can a firm navigate this problem space and move beyond just instincts. See award winning work by Karl Kempf, Intel, that enables a synergy between models and intuition - A Decision-Making Framework for Project Portfolio Planning at Intel Corporation.
This Earth Day, let's take a closer look at how reshoring operations can pave the way for more sustainable supply chains. Join us for an enlightening webinar on the role of reshoring in reducing carbon footprints and promoting environmental stewardship.
Register today: https://lnkd.in/evymEAqk
#EarthDay2024 #SustainableSupplyChains
Being recognized for responsibility and sustainability is great. It reminds of having a reliable compass guiding the way. 🌍 #TheVulcanWay