Tariffs Shake Up the Supply Chain

Tariffs Shake Up the Supply Chain

December 9, 2018

U.S. tariffs on $200 billion of Chinese goods may lead to a permanent relocation of manufacturing companies from China to other Southeast Asian countries.

Some American businesses are looking at relocating manufacturing facilities to places like Thailand or the Philippines.  Some Chinese companies are also considering opening up operations outside their homeland.  One such business may build a massive tire factory in the Philippines to avoid U.S. tariffs.

Some speculate that the tariffs may lead to significant and permanent changes in the global supply chain.  Interestingly, however, Chinese exports were up by almost 16% in October, the first full month of tariff implementation, with companies rushing to send goods to the U.S. before the tariffs rise from 10 percent to 25 percent at the end of the year.


Video Spotlight: China’s exports are still soaring despite the trade war


This post is based on the Industry Week post, Manufacturing exit from China to dodge U.S. duties gains pace, by Angus Whitley, November 7, 2018, and the CNN article and video, China’s exports are still soaring despite the trade war, by Daniel Shane, November 8, 2018. Image source: Shutterstock / Nerthuz.

Discussion Questions:

1. How Continue reading

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Inventory Management Needs An Overhaul

Inventory Management Needs An Overhaul

November 11, 2018

It’s a classic conflict: Operations wants to drive inventory down. Sales and Marketing want excess inventory to satisfy unexpected customer demand and avoid stock-outs.

Modern inventory management software alone cannot reduce excess inventory because of the continued fear of stock-outs. It’s time for some changes in inventory management.

This post is based on the Logistics Management article, Inventory Management 101: Time to step up to the plate, by Bridget McCrea, October 4, 2018 Image source: Noel Hendrickson/Getty Images.

Discussion Question:

1. If safety stock recommendations generated by inventory management technology solutions are ignored, what policy could be implemented to reduce safety stock or dated inventory items at a company like L.L. Bean?

Guidance: Students should review inventory management concepts.  Students should find a retailer and perform a quick internet search on that company.  Ask the students to develop a process to identify categories of retail inventory based on importance to customer satisfaction.  This might include a discussion of ABC inventory analysis.

What should be the policy to reduce safety stock for broad categories based on ABC analysis?  How should Sales and Marketing teammates be involved in setting safety stock policy?  Continue reading

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