• Foreign Supply Chain Woes

    Foreign Supply Chain Woes

    An article from the Wall Street Journal discusses the shrinking advantage Mexican manufacturing has over U.S.-based production. According to the article, “The competition for employees, both finding and retaining them, is nudging up labor costs.” The rising cost of labor, “is an unexpected sticker shock, labor is one of the few costs manufacturers can control, and threatens both profitability and production quality.”

    Wages are only a portion of the supply chain costs associated with an extended manufacturing supply chain. Issues with quality, inventory carrying costs, and cultural differences can also be added expenses and headaches that are hard to quantify, unlike raising labor costs.

    Another recent Wall Street Journal article discusses the challenges of freight stuck in containers either on ships or in a port. Another article noted the bankruptcy of Hanjin Shipping and explored how ships and containers owned by the South Korean company are being denied port entry or unloading. Subsequently, the ports and logistics companies are afraid they won't get paid. The timing couldn't be worse as companies are bulking up for the holiday season.

    Custom Rubber Corp. manufactures molded rubber parts exclusively in the United States and has no language barrier, no time zone issues or unusual holiday shutdowns. Before you consider sourcing your product overseas, think carefully about the unknowns and hidden challenges, then call Custom Rubber Corp.

    Posted Thursday, September 22, 2016 by: Charlie Braun
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