Are you considering re-shoring?
March 20, 2015
More and more companies in the fashion industry are considering, or already actively working on re-shoring projects. By re-shoring we understand to bring back the manufacture of products to the countries of origin of these companies, or to produce nearer to the consumer.
The comparison can no longer be done on the unit cost or landed duty paid cost of a product. This implies ignoring hidden and not-so-hidden costs that affect the final figure, like exportation packaging, international banking/financial expenses, trips of executives, emergency airfreight costs, inflation and currency appreciation in the manufacturing countries, just to name a few.
The re-shoring might not be possible or worthwhile for all companies and products. Maybe it can be wise only to produce some of the components, or to carry out some stages of the manufacturing process only. It takes a deep analysis of costs and a solid project of Manufacturing Excellence in the countries where the production is intended to return, as a really Lean, sustainable way of manufacturing is needed to counterbalance the higher labor cost (higher wages).
At least it is worthwhile the exercise, analyzing a possibility of re-structuring the manufacturing process, analyzing inventory control, supply chain management, and operational inefficiencies.
Here is where Impactiva can help! Our Manufacturing Excellence Business Unit has programs in place to optimize material management, transform the manufacturing process with Lean techniques and scrutinize your entire supply chain for optimization. Our deep knowledge of the leather, footwear and apparel industries combined with our ability to apply industrial engineering techniques guarantees a unique and realistic assessment of the current situation of a supply chain and a sound plan to improve it. Contact us!