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Tag Archives: supply chain

Walmart 2015

Last week we participated in the Walmart US Manufacturing Summit in Bentonville, Arkansas. Walmart has taken the lead and has ignited the Reshoring movement in America by committing to spend $250 Billion for products Made in the USA over the next few years. The annual Summit was an amazing event again this year, with an important “Open Call” day for suppliers pitching their American-made products to Walmart buyers.
Walmart estimates that 1 million new US jobs will be created through this initiative, including direct manufacturing job growth of approximately 250,000 jobs and indirect job growth of 750,000 in the support and service sectors. This alone is important for rebuilding the US economy, but because of Walmart’s size and influence, other retailers are likely to follow Walmart’s lead and establish initiatives of their own that will also result in more job creation in the US. And as we know, Retailers are the “Mothers of all Supply Chains.” These initiatives will affect manufacturers and their global supply chains.
Walmart is quickly becoming a catalyst for the Reshoring movement for another important reason. By igniting the US manufacturing movement, suppliers and their supply chains will cause the reshoring and redevelopment of key industries needed to support manufacturing in general. Take small motor manufacturers, for example. These small motors are in many consumer products such as lawn mowers, vacuums, hair dryers, and small appliances. Yet most of the small motor production was offshored to China in the early 2000s. Bringing back the production of these motors will help boost US content for many US manufactured industrial products.
Plastic injection molding, cut-and-sew equipment and other component parts will be reshored as a result of this movement. The skills to support all kinds of manufacturing were offshored too, and now skilled labor is in very high demand in America. So the Reshoring movement will drive the redevelopment of these industries and skills in America.
The federal government is supporting innovation through the bi-partisan Revitalize American Manufacturing Act of 2014 and the establishment of 45 Innovation Institutes, bringing together companies and universities to co-invest in advanced manufacturing technologies.
Walmart is the company that will make the difference because it is basing the need for innovation on the demand of its customers, and that is powerful.

St Basil's Church

St Basil’s Church

This week I am in Moscow and overall, I find Moscow to be a bit bleak – miles of low-slung beige and gray block-style buildings reminiscent of the Cold War Soviet government. The exceptions include a small group of new downtown skyscrapers and Red Square.

With my China sourcing consulting business, I have been to Beijing and Tiananmen Square many times but this is the first time I’ve been to Moscow and its famous Red Square.  Both cities are heavily industrialized, the seat of their respective governments, and both have famous Squares.  So how does Red Square compare to Tiananmen Square?

First, they are both enormous.  The Chinese claim that Tiananmen can hold a million people and being there, it seems possible.  While not as big, Red Square is quite impressive, with the attached Kremlin grounds and several churches and museums.  Both have picturesque historical buildings including the Chinese Forbidden City and the Russian St. Basil’s Cathedral with the colorful onion domes. On the sides of both Squares are the seats of government: The Chinese Communist Party and the Kremlin.  Both Squares have remarkable museums with extensive and awesome collections. Both Squares have monuments to workers.  Tiananmen has Mao’s Mausoleum and Red Square has Lenin’s Mausoleum.

But the more important thing is that these two Squares were built as places of powerful governments and a show of might and strength. Both Squares are often used for military parades and other official government business. The message seems to be tops-down with leadership and power at the pinnacle and the people at the bottom.   You can “feel” this in both places to the point where it is a bit intimidating.

Contrast that with American monuments such as the Washington Mall.  The Mall seems to have a totally different feel, more egalitarian, more “Of the People.”  Even the White House is surrounded by an open fence, unlike the high walls of the Forbidden City and the Kremlin.

It serves us well to remember and respect these distinctions when we are dealing with global commerce.  Most nations of the world maintain tight control over capitalist ventures and international commerce.   We need to be aware and sensitive to cultural and governmental differences in our Supply Chain planning and execution.

RESHORINGFor the past 15 years or so, I have been helping companies offshore their manufacturing.  There have been, and continue to be, pretty significant cost savings in low-cost labor markets.  But with the waning US economy, it’s time we wake up and put some Yankee ingenuity into bringing some manufacturing back. We think it is possible to bring 15-20% of offshore manufacturing back to the US.

I am not saying we can or should bring it all back.  There are still global cost advantages to low-cost labor markets.  And China represents the largest single target market in the world to sell goods to.  Companies should continue to  manufacture in China to serve the Chinese market.

The U.S. manufacturing sector has added 430,000 jobs since 2010; a small trickle of what we need to recover, but still a move in the right direction. Companies that are reshoring include some of the nation’s largest manufacturers: Apple, General Electric, Ford, Caterpillar and NCR.  A 2012 study concluded that reshoring could add 2 million to 3 million jobs and an estimated $100 billion in annual output to a range of industries by the year 2015.

But bringing manufacturing back isn’t as easy as you may think.  There are a host of considerations and analyses that companies must do to determine the costs and feasibility of reshoring. Several of the important factors in the original offshoring decisions have dramatically changed. Consider these 5 factors as the initial steps in determining your need to rebalance global manufacturing and reshore some activities back to the US.

1)      Cost Increases, Taxes

2)      Innovation and Automation

3)      Market Access and Localization

4)      Skills

5)      Political Environment and Public Sentiment

We are helping clients evaluate the possibilities now.  For more information go to www.BlueSilkConsulting.com/Reshoring

I am proud to announce the publishing of my 3rd book, 42 Rules for Superior Field Service.

Writing a book is a daunting task.  It may look easy and hundreds of thousands of people try it, but it is tougher than you think. 

First you have to submit a book proposal to a publisher and hope your idea is good enough to be accepted. If your book proposal is accepted, you sign a contract and then your publisher or executive editor will work with you to determine a timeline and milestones for the book-writing process. Then you have to get busy and start researching and writing. If you prefer to outline your book first, this task must be accomplished early on.

 If you are writing non-fiction, there is a lot of research to do.  You must be able to write about a topic, plus back up your writing with facts and evidence, and perhaps some statistics.  You may even conduct interviews with experts and surveys for data. 

Armed with research, you begin the writing process.  If you have a full-time job, this means being disciplined enough to write on some sort of schedule whethe42RulesForSuperiorFieldService_Jacket_X1A_050313r it’s weekends or nights or early mornings.  Unfortunately, I find that after working all day, I am often too tired to write effectively at night.  This means that my writing time stretches out longer than it should.  Chapters that should take days to research and write often take weeks to finish.

Once the main body of writing is done, you must add “front matter” and “back matter” including an introduction, dedication, table of contents, appendices, contributors’ bios and an author’s bio.  You must also obtain endorsements from colleagues or well-known people who can recommend your writing.  Endorsements are printed on the back or inside flap of the book.

But don’t do a happy dance just yet…next comes the editing cycles.  First there is executive editing, where your editor reviews the manuscript and gives feedback regarding the content.  She makes suggestions about the flow and the way you have supported your information.  When she’s done, you have a few re-write cycles that may take many weeks to complete. 

After executive editing comes copy editing.  In this stage, the grammar and style sheet police pick at every period, awkward phrase, tense agreement, capitalization, etc.  The copy editor also checks facts and questions every detail that isn’t footnoted or attributed.  When she’s done you have several more re-write and correction cycles.

Finally comes the lay-out process.  Once again you edit the manuscript after it is laid out in book-form and again there are a few edit cycles.  Once you are satisfied, the book goes to print.  Only then you can do a happy dance!

Of course, once the book is published, the marketing cycles begin…

I participated in the 2013 Bloomsday 12K run/walk in Spokane, WA on May 5.  This is an important and well-known road race, mostly because of the event’s size.  About 50,000 people participate from the surrounding areas and some from across the country.  It’s a fun event with bands and fans all along the hilly course and a big party at the finish line.

At about mile 5, while I was desperately trying to take my mind off my aching feet, I started to think about the supply chain support required for special events like this.  Bloomsday is exceptionally well organized and managed, and the supply chain challenges are especially difficult.

Just getting people lined up in the proper time/age groups at the start of the race is amazingly orde

50,000 runners start Bloomsday in Spokane

50,000 runners start Bloomsday in Spokane

rly and efficient.  And consider for example, making sure that there is enough water poured into cups and ready to hand to 50,000 people at 4 stations along the route.  Water is critical to keep participants hydrated in the warm May sunshine and for their successful finish of the race.  These are major logistics challenges of a huge event like this, and the Bloomsday logisticians did a remarkable job.

There are other considerations, too.  T-shirts at Bloomsday are legendary.  The design of the annual t-shirt is kept secret until race day, but behind the scenes, ordering 50,000 shirts must be a daunting task.  The tag inside my t-shirt says it was made in Mexico.  Sourcing t-shirts must have included months of planning for production and importing into the US.  The shirts (in the size we ordered) were available at organized distribution tables at the end of the race. 

These kinds of big events are akin to other supply chain challenges such as pumpkins and costumes at Halloween and Christmas trees in December.  It takes a lot of talent and effort to get the right products to the right place at the right time.  Bloomsday Supply Chain people are some of the best.  Well done Spokane Bloomsday, well done!