|
Material offshore sourcing undergoes standardization |
|
Page 2 of 3
Debating the benefits, counting the costs
Material offshore sourcing is such a hot topic these days that it isn’t without economic and emotional debate. Critics of the process have blasted the industry as being greedy and selling out the home country, while corporate supply chain managers praise it as the inevitable result of globalization of the world economy. The debate highlights cost containment and the availability of cheap goods and services, and environmentalists weigh in with warnings of the looting of natural resources as well as air and land pollution in host nations.
Studies conducted by the Automotive Industries Action Group on behalf of the Material Offshore Sourcing project outline several scenarios that plague the automotive and other manufacturing industries:
• An inordinate amount of paper documents that result in substantial delays in moving freight.
• Service providers faxing, e-mailing and even carrying paper documents, some of which are often unreadable or missing critical information.
• Trading partners using electronic digital interface systems internally and then reverting to paper when conducting transportation and government business.
• End-to-end shipment visibility limited to numerous proprietary systems, many of which are not in “real time” and do not cover all events in the process.
• Split shipments, changing modes and other high and low impact disruptions that are difficult to manage.
The AIAG study pointed out some of the pitfalls for the manufacturers.
“In the current state of communication, communicating by e-mail, phone calls, faxes and paper documents is expensive and error prone,” the report stated.
Specifically, the auto manufacturers are being derailed by several examples of inefficiency:
• 91% of all communication problems are directly attributable to the use of e-mail, phone, fax and paper.
• 79% of all data used in long-distance supply chains is re-keyed multiple times into the various systems for business, customs and shipping.
|
