Review of article content and findings

Business

In the present global business world there are many issues in supply chain logistics that arise when it comes to doing business abroad. In the article Impact on Inventories in Moving Manufacturing outside America for Domestic Demand (Agrawal 2011) the idea of moving the operation of manufacturing plants to outside of the U.S. boarders in order to meet domestic demand is shown to have a considerable impact on various supply chain flows. The general feeling is that inventory levels across the entire supply chain will go up for most of the products in this position. The author claims that this is particularly true for situations in which the manufacturing plant is outside of America and it accommodates domestic demand.

In the article Reverse Logistics (Burnson 2010), the author suggests that getting to know ones customers is the key to keeping the retail supply chain tight and moving. This entails strategic and planned reverse logistics preparation designed for long-term relationships and sustainable revenue production. Consumers are demanding environmentally responsible choices in order to dispose of out of date products. And even though taking such action can cost a lot in the beginning, shippers can reduce risk and become more efficient by doing so.

Summary

Areas of the supply chain that are affected when manufacturing is done offshore include raw materials, work-in-process inventory, finished goods at the factory and warehouses and product that is on the shelf at retailers. Manufacturing overseas causes the raw material inventories to go down because the farther that the plant is away from the source of the raw material the more that the inbound transportation time increases. This results in lower in-transit inventories for raw materials. In regards to work-in-progress inventory there are many situations where a company chooses for a lower level of plant automation in order to decrease the upfront investment and leverage the cheap wages. In these cases the inventory levels will go up creating a storage issue and expense. There also tend to be issues with having a lot of finished product to store because of transportation issues that often occur in other parts of the world. This in turn often leads to low inventory on the shelves to be sold at the various retailers.

The notion of reverse logistics stands for all procedures related to the recycle of products and materials. It is the process of planning, putting into practice, and controlling the knowledgeable, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of use to the point of source for the reason of recapturing worth or proper discarding. The issues for sellers and vendors is to process returns at a proficiency level that permits rapid, efficient and cost-effective compilation and return of merchandise. Customer requirements facilitate command for an elevated standard of service that includes correctness and timeliness. In the end it's the logistic company's responsibility to cut down the connection from return origination to the point of resell.