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Will shortening supply chains benefit American businesses?

For the past twenty years we've seen a globalization of production and distribution. The present financial crisis is causing companies to rethink one component, that of distribution of component parts.

Supply chain experts Ernest and Young estimate that 70% of a company's carbon footprint comes from transport and other costs in the supply chain.

So then, with such high costs, companies are setting up supply chains closer to home. US companies are restructuring their operations and using Mexico and a supply center for component parts. European operations are using Eastern Europe as the hub of their supply operations. These moves are intended to shorten supply chains to reduce costs. The long supply chains all the way back to China are being scrapped in favor of these shorter, regional chains.

Continue reading Will shortening supply chains benefit American businesses?

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