keynote feature Far and away
the best
Nearsourcing is the concept of picking low-wage, high-resource areas closer to the finalmarketplace inwhich tomanufacture goods. It should be quicker and easier than the establishedmethod of globally outsourcing production to low-cost countries as it does not involve such long distances, communications can be better and it’s more environmentally friendly,many claim. But will nearsourcing ever challenge the established preference of outsourcing production to areas like China and India? IanMartin Jones investigates
verymuch cheaper third party into the establishedway the manufacturer – retailer relationship had previously functioned – the concept of outsourcing the manufacturing process on a global scale to a low-cost country on the other side of theworld had been born. Almost overnight, outsourcing gave theworld access to
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cheaper consumer products. As the prime production locations identifiedwere thousands of kilometres fromthe cities inwhich the end-consumers lived, the idea soon led to awhole newarea of opportunity for the transportation provider and particularly for the air freight business. But the process of evolution did not stop here. Costs
could be cut back even further if just-in-time deliverywas used to reduce the need for retailers to hold vast stocks of goods. Time-sensitive logistics techniques could be employed to ensure that the goods arrivedwith the retailer only amatter of hours before they had been promised to the customer. It also freed retailers fromhaving to
1 AIR LOGISTICSCHINA
owards the end of the last century theworldwas introduced to a newidea thatwould completely change theway and quicken the speed that manufacturers of the futurewould bring goods to themarketplace. It involved the introduction of a
construct their own bricks-and-mortarwarehouses in which to store these costly items. Itwas the Promised Land formanufacturing, a retail Utopia, Nirvana, Shangri-La, a YellowBrick Road of consumer opportunity.Outsourced production and just-in-time deliverywould change the world of the supply chain – and the air freight businesswas quick to profit fromthat fact.
BOOMING FORTUNES The need tomove rawmaterials into the new manufacturing centres and then transport the finished items to the eager purchaser ensured that the fortunes of the freight forwarder and the air cargo business boomed in tandem. Vast amounts ofmoneyweremade in the Klondyke atmosphere that ensued in the chosen countries, while in others –mostly the end-consumer nations – factories closed down, employeeswent home for the last time after a hard day’swork and the skilledworkforce of these countries joined the social security queues. A Brave NewWorldwaswith us and itwas one that
everyone could afford – except perhaps those redundant productionworkers fromthe end-consumer countries who had not yet been retrained as financial services
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