Making the Decision to “Reshore”

AUGUST 27, 2014

reshoring-5_0“Recently, rising energy prices, wage inflation and customer demand for shorter lead times have led many U.S. companies to consider “reshoring” the production of goods bound for domestic markets back to America,” writesIndustry Week (Aug.5, 2014). But getting it right can be tricky. A decision to reshore needs to consider the following 7 issues:

1. A focus on total costs instead of unit costs: By focusing on unit costs instead of the total cost of ownership – which includes costs such as transportation, intellectual property risks and inventory carrying costs – manufacturers are overestimating potential savings from overseas operations by 20%- 30%.

2. Invest time to Continue reading

Is T.J.Maxx the Best Retailer in the U.S.?

AUGUST 9, 2014

tjmaxxT.J. Maxx (the TJX company) is the “black box” of retailing–one of the most secretive retailers around– writes Fortune(Aug. 11, 2014). With over 3,200 stores in the U.S., the TJX off-price business is a volume game: selling a ton of goods and selling them fast. The measure of speed here is how quickly a company turns over its inventory: TJX does that every 55 days, vs. 85 for its peer group. Indeed, the company is structured to whisk items through its distribution centers and stores: TJX shipped some 2 billion units to its stores in 2014, up from 1.6 billion in 2010.
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