Local Sourcing, Global Supply Chain

Local Sourcing, Global Supply Chain

The recent announcement by Google-owned Motorola Mobility that all new Moto X smartphones sold in the US will be manufactured in Texas, highlights the continued importance of the global supply chain and role of freight forwarders and logistics services providers (LSPs) in successful local sourcing strategies.

Motorola expects to benefit from the new, relatively close physical proximity of its Illinois and California-based designers and technical experts to its Texas manufacturing facility, as well as tapping into US consumers’ sense of patriotism in buying ‘home grown’, a choice that until now has been impossible to make for smartphones.

Team_GlobeYet the company is at pains to make it clear this is part of a global operations strategy, with devices continuing to be assembled in China and Brazil and components presumably continuing to be sourced from emerging markets based on cost and quality. The Texas manufacturing facility will be managed by Motorola’s Singapore-based global manufacturing partner and is located less than four hours by road from the Port of Houston, which is a key US freight forwarding hub, ranking first in the United States in international waterborne tonnage handled.

It’s not surprising to see a major manufacturer making a very public decision to move towards local sourcing, particularly one serving Western markets whose consumers are still continuing to suffer the after-effects of a major economic downturn. It provides greater possibilities for customizing products to better suit the local market than producing exactly the same product in one or two locations for global distribution.

However following through on the decision to manufacture locally is impossible without a solid global supply chain to ensure the right components are shipped to the right location at the right time. And of course manufacturers adopting this model will of course still be at risk from production delays, for example caused by extreme weather, or strike action, meaning supply chain visibility and shipment tracking remains a key priority for shippers and freight forwarders alike.

This will likely mark the start of a growing number of ‘hybrid’ local-global sourcing moves by technology manufacturers seeking to gain cost benefits and competitive advantage in an increasingly fast-moving market, serving ever-more demanding (and fickle) consumers.

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