Business Facilities - October 2008 - (Page 11)

from today, but also forecast data of what’s predicted for five or 10 years out. Before signing on the dotted line, learn as much as you can about the future of the communities under consideration for a relocation: • What are the labor predictions? • Will the labor pool be able to support your future needs? • What’s expected in terms of population growth? • How equipped is the community to handle this growth? • What effects will steady growth have on the existing infrastructure? • How high are taxes expected to rise? Because location decisions are always long-term decisions, it is important to look beyond today’s local headlines to make sure the location you select will not only serve your company today, but also over the long term. Rick Underwood Vice President of Contract Logistics SalesAmericas APL Logistics Oakland, CA Remember to add water. More often than not, international manufacturing and ocean shipping go hand-in-hand. Granted, companies can use airfreight to move their goods across the sea. However, most don’t do so routinely because aviation moves cost eight to 10 times more than waterbased transportation and create a significantly larger carbon footprint. Ships will be a key part of your business’ future if you move production overseas, so prepare accordingly for supply chain adjustments. Among other things, you’ll need to: Reset your supply chain clock to run in weeks, rather than days or hours, because even the shortest ocean transit can’t turn on a dime. Re-evaluate your current inventory situation to determine how much inventory you’ll want to keep on hand at distribution centers in the United States (especially during the peak seasons). Lastly, acquaint yourself with international transportation regulations and current homeland security requirements because these also will have an impact on product flow. Ports of origin are especially important considerations. In today’s ship-centric supply chains, port access is an important consideration for companies both here and overseas. And “access” means far more than just proximity to your factories, distribution centers or end users. There are huge differences in ports’ potential throughput—the rate at which they can get goods in and out. Ports in China, for example, currently have some of the best throughput in the world both because of their infrastructure investments and labor conditions that allow them to keep this infrastructure in use for more shifts. By contrast, many ports in Europe are experiencing significant congestion right now; and where there’s congestion, there tends to be delays. There also are wide variations in ports’ channel depth, bridge clearance and offloading equipment—a distinction that may become even more important when the Panama Canal expansion is complete and companies start turning out larger ships that can’t necessarily be accom- modated by just any port. Keep this in mind as your company reviews any prospective manufacturing sites because, if ports of origin can’t accommodate the kinds of vessels you want to use or volumes you expect to ship, that could prove to be a problem in the long run. Find and utilize supply chain expertise. Most companies understand that higher overall transportation and material handling costs go along with the territory of international manufacturing. After all, they’re increasing product moves by thousands of miles and multiple transportation modes. However, don’t fall into the trap of assuming that every increased expense is a fait accompli simply because your organization chooses a manufacturing venue that’s not logistically ideal. There’s a lot that seasoned supply chain experts can do to help you make even a “bad” location better, whether it’s designing the ideal inbound or outbound product flow via optimization and simulation, coordinating with vendors, or designing the best configuration of distribution centers to support your new supply chain. Kathleen Ellis Senior Vice President Chubb & Son Whitehouse Station, NJ Take advantage of global opportunities now. Even though small companies face greater exposures, these can be significantly mitigated by carefully BUSINESS FACILITIES 11

Table of Contents Feed for the Digital Edition of Business Facilities - October 2008

Business Facilities - October 2008 Contents First Word Snapshots Metro Spotlight: Phoenix, AZ Essential Relocation Tips Metro Spotlight: Fayette County, GA Corporate Moves: Kentucky Austria: Hungry for International Trade Foreign Trade Zones: Global Expansion at Reduced Cost New York is Banking on High-Tech Growth Metro Spotlight: Cuba, MO The Garden State is Growing it's City Centers Information Technology: No Signs of a Slowdown Advertiser Index Inside LiveExchange

Business Facilities - October 2008

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