World Trade - November 2008 - (Page 7)

® INSIDE WORLD TRADE Group Publisher Tom Esposito Publisher Sarah Harding Editorial Director Neil Shister shistern@bnpmedia.com Managing Editor Lara L. Sowinski Art Director Michael T. Powell Contributing Writers Mark Bernstein, Richard Barovick, Gail Dutton, Winn Hardin, Joshua Kurlantzick, Andrea MacDonald, Clay Risen, Jeremy Smith, April Terreri, Amy Zuckerman WORLD TRADE MAGAZINE EDITORIAL ADVISORY BOARD Grant Belanger Ford Motor Company Director South America Operations Steve Palagyi Director, Paciﬁc Region PRTM Consulting Erik Autor Vice President and International Counsel National Retail Federation Susan G. Esserman Chair, International Department Steptoe & Johnson Beth Enslow Global Supply Chain Resiliency Marsh, Inc. Kurt Cavano, Chairman and CEO, TradeCard Frank Vogl, Vogl Communications, Washington D.C. Thomas E. Crocker Co-Chair International Trade and Regulatory Group, Alston & Bird LLP Unexpected Responses to Unanticipated Change I NEIL SHISTER SALES Publisher /Midwest Sales National Sales Director-East Sarah Harding 216.991.4861 hardings@worldtrademag.com Randi Giambruno 516.377.3906 giambrunor@worldtrademag.com Ed Lohmann 925.648.2562 lohmanne@worldtrademag.com Vito Laudati 630.694.4018 Fax: 248.283.6618 laudativ@bnpmedia.com Hong Kong Ofﬁce Publicitas Wendy Lin Tel: 852.2527.3525, Fax: 852.2528.3260 Steve Beyer Tel: 847.516.1977, Cell: 630.699.7625 beyers@bnpmedia.com put off writing this column until the absolute last minute, so chaotic is the economic turbulence underway. Certainties of even just a few weeks ago are now up for grabs. The one truth you can bank on right now is when somebody says, “I don’t know!” Here’s hoping that the dust has settled as National Sales Director-West Inside Sales Manager/Print Asia Director Custom Media OPERATIONS STAFF Production Manager Marketing Coordinator Web Seminar Project Manager Reprint Manager & Trade Show Coordinator Group Audience Development Manager Multimedia Manager Corp. Audience Audit Manager Research Editor Postal List Rental E-mail List Rental Single Copy & Back Issue Sales John Talan, 248.244.8253 Danielle Kimble Bryan Cairns, 248.786.1613 Cindy Williams 610.436.4220 ext. 8516 williamsc@bnpmedia.com Christopher Sheehy Katie Jabour Catherine Ronan Amy Mills Robert Liska, 800.223.2194 robert.liska@edithroman.com Shawn Kingston, 800.409.4443 shawn.kingston@epostdirect.com Ann Kalb, 248.244.6499 kalba@bnpmedia.com WORLD TRADE HEADQUARTERS 600 Willowbrook Lane Ste. 610 West Chester, Pa. 19382 www.worldtrademag.com CORPORATE CORPORATE DIRECTORS Publishing Timothy A. Fausch Publishing David M. Lurie Publishing John R. Schrei Audience Development Christine A. Baloga Custom Media Steve M. Beyer Human Resources Rita M. Foumia Information Technology Scott Kesler Production Vincent M. Miconi Finance Lisa L. Paulus Creative Michael T. Powell Marketing Douglas B. Siwek Directories Nikki Smith Conferences & Events Scott A. Wolters Clear Seas Research John E. Thomas BNP Media Helps People Succeed in Business with Superior Information BNP Media Corporate Telephone: 248. 244.6400 you read this. Whether or not we’ve seen a true bottom on global markets, the facts on the ground in the real economy show things changing fast and furious. We knew that even before the ﬁnancial meltdown. And, now it’s even more so! At the annual CSCMP meetings in Denver, I spent an hour ‘looking into the future’ with the eminent Georgia Tech supply chain expert, Professor John Langley. At one point we got to discussing supply chain centricity, the principle of organizing the enterprise around its supply chain, which is a concept more frequently praised in business school discourse than implemented in actual companies. I mentioned that at two places where I had reported this actually being done, IBM and Cisco, leaders were quick to admit that it had taken real pain to drive the process. John responded to the effect that we’re likely to see lots more of such ‘pain-driven’ supply chain initiatives. As he put it, the new axiom for the new economic paradigm: “the supply chain that worked for you last year won’t work for you next year.” A key element in ‘this year’s model’ is the resurgence of near-sourcing, ﬁguring out which elements in your supply chain can be brought closer to home instead of shipped over from the other side of the Paciﬁc. The reasons aren’t hard to identify: transportation expenses are surging, ‘hidden’ landed costs can quickly cancel out the initial advantage of cheap labor, the supply chain is faster, more responsive and safer when it is less extended. But changing gears for lots of companies won’t be easy. Various observes have noted that companies often got into off-shoring (read: China) almost impulsively and without fully considering the long-term implications; they now ﬁnd themselves locked into business models and processes that are more committed to these sources than might have been optimally desirable. We’re focusing on Mexico in this issue as one way out of this dilemma. Proximity to the U.S. and ‘special status’ as a NAFTA partner puts Mexico on most short-lists. The ﬁrst wave of border workshops and factories in the ‘90s (before the mass exodus to China) produced a reservoir of experienced workers. The last several Mexican Presidents have been unequivocally ‘pro-development,’ implementing their policies with petro dollars. That having been said, though, our article examines the ‘down side’ to Mexico, as well. Infrastructure progress has been disappointing. Highways outside of the border zone are inadequate to sustain time-sensitive supply chains; the commercial legal system is not always reliable. So ‘buyer beware.’ In looking to Mexico to implement an agile near-source supply chain, it’s going to be important to exercise due diligence. Near-sourcing is also going to have an impact on transportation providers. Consultants Ben Gordon and Karen Rutt, in an article accompanying the Mexico piece, sketch out the kinds of concerns shippers (and providers) need to be attentive to as the U.S. enters the “major change about to sweep through the supply chain.” So whichever way the financial gods blow, its time to acknowledge the winds of change and start addressing the agility of your supply chain. Neil Shister, Editorial Director shistern@worldtrademag.com For subscription information or service, please contact Customer Service at: Tel: 847.763.9534 or Fax: 847.763.9538 or e-mail WTR@halldata.com PRINTED IN THE USA WWW.WORLDTRADEMAG.COM 7 http://www.worldtrademag.com http://WWW.WORLDTRADEMAG.COM

Table of Contents Feed for the Digital Edition of World Trade - November 2008

World Trade - November 2008 Contents Unexpected Responses to Unanticipated Change Reading the States of Risk in Today’s Global Economy Supply Chain Watch Tradewinds Failed Promise: Mexico and NAFTA, 15 Years Later The Short Tale Marrying Trade Finance and Transportation into a Single Transaction Trucking Gets a Double Whammy Are We Safe Yet? Logistics Resurrects the Rust Belt Keep on Compressing

World Trade - November 2008

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