Shippers and logistics providers are squaring off about their fundamental shifts in how they are conducting business. As the global economy continues to ebb and flow, the principles the providers maintain are causing conflict. The shippers are concerned with eliminating as much waste as possible, and trying to keep operating costs down. On the logistics end of the spectrum, this is conflicting with their desire to create long-lasting relationships with the customers they currently have.
Tag Archive for Logistics
In this economy, the decision on whether or not to outsource can often be a no-brainer. Delegating tasks too costly to execute in-house, to organizations that specialize in them, is a logical solution to many businesses’ dilemmas. The real question arises when the given organization needs to determine who to outsource to. Offshoring and urban sourcing – while they can both be effective in numerous situations – often come with high international maintenance and travel costs, or expensive commuting and real estate bills respectively.
An article in Logistics Management says our neighbor to the south “may soon become more attractive as a sourcing alternative.” This is according to Moffatt & Nichol, an engineering and construction consultant firm. They report that “all of Latin America is becoming more attractive, but we really feel that Mexico is going to be an area of increased manufacturing concentration.”
China would be the likely loser in any increase in “near-shoring” activity. “Quality fade” partly as a result of a number of recalls on products imported from China is one of the reasons for the push toward sourcing from Mexico and Latin American economies. Reduced landed cost is also cited as a compelling factor given the closer proximity Mexico has to the US.
Here is a link to the Logistics Management article:
“While I am not opposed in principle to reverse auctions, it is clear they are causing significant perturbations in the VA supply chain,” says Jan Frye, VA deputy assistant secretary for acquisition and logistics.
Perturbation. Interesting word.
The quote is from a Federal Computer Week report this week that the Veterans Affairs Department (VA) has ordered its contracting arm, the Veterans Health Administration, to cease and desist, at least temporarily, the use reverse auctions.
This move, news of which Federal Computer Week received in an internal VA memo provided by an anonymous source, comes on the heels, ironically, of a VA announcement not long ago touting major savings as a result of reverse auctions. Read more