Another Tool to help make the reshoring decision
Dr Suzanne de Treville, professor of operations management, HEC Lausanne – the business school at the University of Lausanne – explains how local sourcing improves innovation, availability and obsolescence.
Dr Treville points out that keeping innovation near manufacturing leads to incremental innovation. Being near the market allows the manufacturer to better understand changes in the market. With this knowledge they can then use tools such as the Cost Differential Frontier (CDF) Calculator, developed by the Université de Lusaine to compare costs of different combinations of products and runs. For example: “When we combine exposure to demand peaks with the risk of inventory losing its value,…[CDF] makes clear that producing locally costs less than producing offshore and incurring demand volatility risk”. - See more at: The economic case for reshoring
