apics_2015_poster_Tuksakulvith_Noppadol_Champ

apics_2015_poster_Tuksakulvith_Noppadol_Champ

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  Reshoring and IndustryCluster Optimization By Noppadol Champ Tuksakulvith INTRODUCTION Businesses are required to change over periods of time. Practices that we use today may or may not be used in the future. A problem that has arisen in the last couple of years is the price fluctuation of petroleum fuel. Firms who outsource to developing countries suffer devastasting losses due to high logistics costs. A new practice, reshoring or inshoring, is slowly emerging in today’s business world. Reshoring is the practice of relocating a company’s business facility close to where the consumers are or back to the original location. Labor costs, logistics costs, and foreign currencies are three primary forces that make reshoring an ideal practice in the 21st century. KEY FACTS The Midwest is known as an automobile hub. Aisin Seiki is a good case study of the relationship between an automobile supplier and manufacturers. Aisin Seiki is a Japanese corporation which develops and produces components and systems for the automotive industry. Aisin Seiki has factories spread throughout the Midwest and Southern Illinois, giving the firm a competive advantage for supplying their products to various automobile manufactureres in a timely manner. Locating near their consumers give companies an advantage on working collaboratively with their consumers on product development and solving problems that may arise. PURPOSE An industry cluster database was developed, using information provided by StatsAmerica. The purpose of the industry cluster is to identify those areas of the economy with a dominate presence in the region. Lastly, a location quotient is generated as a benchmark for comparing local existing industries to industries around the nation, providing a better understanding of a region’s innovation performance and potential. LESSONS LEARNED With technology driving up opportunity cost, location will play an important role in business success. Excellent demand planning, supply chain networks, and logistics systems will be critical game changers. Clusters rely on an existing infrastructure and a relationship with suppliers and customers. Clusters result in firms’ collective efforts to improve their products or services with a potential to reduce logistical problems. Advanced Materials Agribusiness, Food Processing & Technology Arts, Entertainment, Recreation & Vistor Industries Biomedical/Biotechnical (LifeSciences) Business & Financial Services Chemicals & Chemical Based Products Defense & Security Education & Knowledge Creation Energy (Fossil & Renewable) Forest & Wood Products Glass & Ceramics Information Technology & Telecommunications Transportation & Logistics Fabricated Metal Product Mfg Machinery Mfg Electrical Equipment, Appliance & Component… Transportation Equipment Mfg Printing & Publishing -0.5 0 0.5 1 1.5 2 2.5 3 3.5 4 -100.00% -50.00% 0.00% 50.00% 100.00% 150.00% 200.00% 2012LocationQuotient Percentage Change in Location Quotient (2006-2012) Location Quotient: White County, Illinois Figure 1: Cluster of industries in White County, Illinois