Take a brief look at the following supply chain migration (GM Supply of Wiring):
- 1980 – USA/Germany
- 1990 – Mexico/Spain
- 2003 – China/Honduras
- 2005 – Thailand/Ukraine
- 2008 – ?
Notice anything special?
Over the years GM’s migration frequency increased. Now there are probably many reasons for this but if anything, this is a clear cut example of how important supply chain flexibility has become in order to stay competitive (although one can argue the competitiveness of GM, but I believe that owes more to strategic decisions rather than supply chain practices). To ensure that the supply chain provides the necessary competitive advantages it needs to be constantly monitored by a number country relative cost drivers such as cost of labour, relative purchasing power, cost of energy, health care, relative capital costs, transportation, raw material costs, etc.
These sentiments are echoed in this World Trade Magazine article from a few weeks ago; which – quite surprisingly – points out the US Midwest as one of the places where companies migrate their supply chains.
Omaha might not become the next Shenzhen, but I truly believe that a number of smaller “Shenzhen’s” will develop over the next few years, all with their own specific offers and possibilities. As this happens; we will truly begin to see what global trade is really all about.
