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The End Of The Affair?

By Art van Bodegraven | 10/24/2011 | 12:13 PM
Maybe the plot line isn't quite the same as in Graham Greene's very fine (and somewhat autobiographical) novel, or the films based on it. Perhaps the scenario is a little more like Mildred Pierce, in which ambitious Mildred and her unimpressive ex-husband find themselves together after parallel roller-coaster rides of independence, success, lies, and betrayal. The love/hate triangle in this case involves manufactuirng, China, and the United States. Over tha past forty years or so, manufacturing has been lured away by the almond-eyed alluire of low-cost exotic labor. But, things do change. Wages in China have risen by 60% or 70% over the past few years. The esteemed strategy firm, Boston Consulting Group (BCG) now estimates (in an August report) that the total cost differential (incluiding both labor and transport) between China and the US will be 10% or less in just a few years. At that point, are the risks, uncertainties, performance variabilities, ans intellectual property exposures worth it? Will the next step be to go even farther away in search of younger, cheaper exotic labor? Or, will it clearly be time to come, if not home, closer to home? Today there are cases of return, or relocation to this hemisphere. Not yet a fad, and not with enough critical mass to be a clear trend. But, the possibility to become a 21st-century mega-trend is definitely there. The supply chain consequences could be enormous, in time, cost, structure, and reliability. The impact on relationships among supply chain partners could be seismic. I can't wait to see how the movie ends.

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About Art van Bodegraven

Art van Bodegraven

Art van Bodegraven (1939 - 2017) was Managing Principal of the van Bodegraven Associates consultancy and Founding Principal of Discovery Executive Services, which develops and delivers supply chain educational programs. He was formerly Chair of the Supply Chain Group AG, Partner at The Progress Group LLC, Development Executive at CSCMP, Practice Leader with S4 Consulting, and a Managing Director in Coopers & Lybrand's consulting practice. Concentrating in supply chain management and logistics for over 20 years in his 50+ year business career, he has led ground-breaking strategic, operational, and educational projects for leading US and global clients. Art was principal co-author of DC Velocity's Basic Training monthly column for a decade, and was the principal co-author, with Ken Ackerman, of Fundamentals of Supply Chain Management, the definitive primer in the field. His popular blog, The Art of Art, has been a staple of DC Velocity's web site since its inception.


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