Some companies are finding that higher transportation costs are eroding the benefits of manufacturing overseas. As the escalating oil crisis unfolds, companies with long, complex global supply chains are reevaluating whether their Asia-based networks still make economic sense. Pete Sinisgalli, president and CEO of Atlanta-based Manhattan Associates, reports that at a recent conference sponsored by AMR Research, supply chain leaders from around the country met to discuss key issues facing the industry. "The No. 1 topic was the increasing transportation costs, whereas in the past number of years the leading topic had been supplier performance." High on the agenda of management decisions associated with transportation costs are the net value of extended global supply chains. This is prompting reevaluations whether near-sourcing offers a solution to ease the pain and an alternative location for U.S.-bound goods currently coming from China and the Pacific Rim. With about 65 percent of the country's population residing in the east, near-sourcing from Mexico, Central and South America certainly offers an attractive advantage of not having to ship cross-country from ports like Los Angeles or Long Beach.
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