We are managing in an Amazon-impacted world. Customers expect rapid deliveries, 24/7 accessibility and products and services tailored to their needs. Customers are not willing to wait. In fact, they prefer same-day delivery.
Our manufacturing clients are experiencing lead time reduction requests from their customers. Some are requests; many are required to maintain the business. It is wide spread. Building products that clients ship within a day. Food clients ship rapidly — within a day or a week at most. Optics, industrial equipment, consumer products — across-the-board requests for shorter lead times. And even clients such as aerospace with traditionally long lead times have slashed lead times by 50%.These provide extreme challenges with extended supply chains.
If customer expectations weren’t enough, labor costs in China and other outsourced manufacturing geographies are increasing. Other costs including sometimes hidden costs are high as well. The bottom line is that for non-commodity products, the total costs of outsourcing are rising to parity with North America sources.
And, risks abound. Natural disasters, political conflict, port strikes, bankruptcies and more. Thus, executives are reacting to these factors and re-thinking their strategies about outsourcing, insourcing and near-sourcing.
Please help contribute to our research study. If you have outsourced, insourced or near-sourced or if you have thought about and/or evaluated any of these options or plan to in the future, we’d appreciate your input. Complete the survey and help others facing the same decisions make better decisions. Also, please register if you are interested in receiving the results.
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