Question

People have talked about bringing jobs back to U.S. for a while. After President Trump won the 2016 election, we did see companies canceled plans to move manufacture abroad. But we all know that unless it can bring more benefit to a company over long term, this won't be the main stream trend.

To compete with foreign suppliers from low cost countries, what capabilities local suppliers in high-cost countries should develop? Can they win the battle? How will these capabilities affect the inventory level of the supply chain?

Answer 1

Following capabilities should be developed by local suppliers in high-cost countries.

1)They should improve their production capacity.

2) Local suppliers can often incur loss because of demand uncertainty. But by comprehensive understanding of local demand and reducing the demand supply uncertainty, they may have an edge over the foreign suppliers.

3) By understanding replenishment lead times, lead times variability and availability of desired products at appropriate time, they can design the supply chain logistics in an efficient way.

They can win the battle as they can be more efficient with inventory levels and their  the transportation costs can be less as compared to the foreign low cost countries.

Their familiarity with the local demand can make their supply chain more efficient.