Managing Automation - November 2008 - (Page 21) Rocked by record-high oil prices and beset by uncertainty, manufacturers are using technology to reshape their supply networks and make smarter transportation/ logistics choices. BY L A U R E N G I B B O N S PA U L he world was a different place two years ago when Cequent Group decided — finally — to go into China. Like so many other manufacturers before it, the $500 million maker of vehicle accessories and after-market supplies needed to cut costs. Cheap labor was the lure. Unfortunately, much of the savings expected from moving production offshore has proved fleeting, eaten away by increasing costs. A number of factors are to blame, from fluctuating currency values and rising labor costs to miscalculating landed supply chain costs. By far the biggest variable, however, has been the cost of oil, which has reached levels that were unimaginable in 2006. “All of the products that we manufacture in China are made of high-density steel — very heavy to ship,” says Walt Mills, director of IT for Cequent, an operating group of TriMas Corp. “Increased logistics costs were not even on the horizon when we went into China. But when costs started to skyrocket, we started to see those benefits going away.” For more than 20 years, supply chain decisions all over the world have been predicated on cheap oil. With prices well under $50 per barrel, manufacturers could afford to roam the globe in search of cheap labor while also keeping inventory levels lean. Now, that picture is cloudy. At press time, oil prices had settled below $100 per barrel, down from dizzying highs near $150 earlier this year. But those who expect prices to drop back down to a cozy $30 per barrel should think again. “People shouldn’t feel a lot of relief,” says Larry Lapide, director of demand management at the Center for Transportation and Logistics, Massachusetts Institute of Technology. “These costs are going to stay high. 21 November 2008 Photo: Jupiterimages
Table of Contents Feed for the Digital Edition of Managing Automation - November 2008 Managing Automation - November 2008 Contents Take 1 At One-Year Mark, Wonderware President Focuses on Empowering Plant Operators Oracle Demos Fusio Apps, Reveals Delays Baan Founder Says BPM Will Replace ERP Emerson Talks Wireless at Annual User Group Event Merger Complete, Intercim Focuses on Collaboration Notes Cover Story: The New Supply Chain Reality Special Report: Keep Out Integration: The On-Demand Interchange Industries: Ending the Endless Waves of Paper Product Scan Advertiser Index Next Managing Automation - November 2008 Managing Automation - November 2008 - Managing Automation - November 2008 (Page Cover1) Managing Automation - November 2008 - Managing Automation - November 2008 (Page Cover2) Managing Automation - November 2008 - Managing Automation - November 2008 (Page 3) Managing Automation - November 2008 - Contents (Page 4) Managing Automation - November 2008 - Contents (Page 5) Managing Automation - November 2008 - Contents (Page 6) Managing Automation - November 2008 - Contents (Page 7) Managing Automation - November 2008 - Take 1 (Page 8) Managing Automation - November 2008 - Take 1 (Page 9) Managing Automation - November 2008 - At One-Year Mark, Wonderware President Focuses on Empowering Plant Operators (Page 10) Managing Automation - November 2008 - Oracle Demos Fusio Apps, Reveals Delays (Page 11) Managing Automation - November 2008 - Baan Founder Says BPM Will Replace ERP (Page 12) Managing Automation - November 2008 - Baan Founder Says BPM Will Replace ERP (Page 13) Managing Automation - November 2008 - Baan Founder Says BPM Will Replace ERP (Page 14) Managing Automation - November 2008 - Emerson Talks Wireless at Annual User Group Event (Page 15) Managing Automation - November 2008 - Emerson Talks Wireless at Annual User Group Event (Page 16) Managing Automation - November 2008 - Merger Complete, Intercim Focuses on Collaboration (Page 17) Managing Automation - November 2008 - Notes (Page 18) Managing Automation - November 2008 - Notes (Page 19) Managing Automation - November 2008 - Cover Story: The New Supply Chain Reality (Page 20) Managing Automation - November 2008 - Cover Story: The New Supply Chain Reality (Page 21) Managing Automation - November 2008 - Cover Story: The New Supply Chain Reality (Page 22) Managing Automation - November 2008 - Cover Story: The New Supply Chain Reality (Page 23) Managing Automation - November 2008 - Cover Story: The New Supply Chain Reality (Page 24) Managing Automation - November 2008 - Cover Story: The New Supply Chain Reality (Page 25) Managing Automation - November 2008 - Special Report: Keep Out (Page 26) Managing Automation - November 2008 - Special Report: Keep Out (Page 27) Managing Automation - November 2008 - Special Report: Keep Out (Page 28) Managing Automation - November 2008 - Special Report: Keep Out (Page 29) Managing Automation - November 2008 - Special Report: Keep Out (Page 30) Managing Automation - November 2008 - Special Report: Keep Out (Page 31) Managing Automation - November 2008 - Special Report: Keep Out (Page 32) Managing Automation - November 2008 - Special Report: Keep Out (Page 33) Managing Automation - November 2008 - Integration: The On-Demand Interchange (Page 34) Managing Automation - November 2008 - Integration: The On-Demand Interchange (Page 35) Managing Automation - November 2008 - Integration: The On-Demand Interchange (Page 36) Managing Automation - November 2008 - Integration: The On-Demand Interchange (Page 37) Managing Automation - November 2008 - Integration: The On-Demand Interchange (Page 38) Managing Automation - November 2008 - Integration: The On-Demand Interchange (Page 39) Managing Automation - November 2008 - Industries: Ending the Endless Waves of Paper (Page 40) Managing Automation - November 2008 - Industries: Ending the Endless Waves of Paper (Page 41) Managing Automation - November 2008 - Industries: Ending the Endless Waves of Paper (Page 42) Managing Automation - November 2008 - Industries: Ending the Endless Waves of Paper (Page 43) Managing Automation - November 2008 - Industries: Ending the Endless Waves of Paper (Page 44) Managing Automation - November 2008 - Industries: Ending the Endless Waves of Paper (Page 45) Managing Automation - November 2008 - Product Scan (Page 46) Managing Automation - November 2008 - Product Scan (Page 47) Managing Automation - November 2008 - Product Scan (Page 48) Managing Automation - November 2008 - Product Scan (Page 49) Managing Automation - November 2008 - Product Scan (Page 50) Managing Automation - November 2008 - Product Scan (Page 51) Managing Automation - November 2008 - Product Scan (Page 52) Managing Automation - November 2008 - Product Scan (Page 53) Managing Automation - November 2008 - Product Scan (Page 54) Managing Automation - November 2008 - Product Scan (Page 55) Managing Automation - November 2008 - Product Scan (Page 56) Managing Automation - November 2008 - Product Scan (Page 57) Managing Automation - November 2008 - Product Scan (Page 58) Managing Automation - November 2008 - Product Scan (Page 59) Managing Automation - November 2008 - Advertiser Index (Page 60) Managing Automation - November 2008 - Advertiser Index (Page 61) Managing Automation - November 2008 - Next (Page 62) Managing Automation - November 2008 - Next (Page Cover3) Managing Automation - November 2008 - Next (Page Cover4)
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