When the editor of EBN approached me to author this column, I objected, saying, “Wait a minute. I don’t know nothin’ about supply chains,” to which he replied that his readers are eager for variety and would be happy if I wrote about “anything BUT supply chains.”
And so I have. But I have to admit that, as it keeps popping up in the news, supply-chain stuff kind of fascinates me. For example, I know that the invention of the container ship was a big deal for the supply chain, because it expanded the capacity of a single ship while automating the loading and unloading process so drastically that the word "stevedore" has slipped from the vernacular.
This vast streamlining of the trans-oceanic part of the supply chain has resulted in some amazing stories. One that received a lot of attention during the presidential election, because it involved Bain Capital (Mitt Romney’s alma mater), was the shift of a sensor manufacturer named Sensata from a little plant in Freeport, Ill., to a new location somewhere in China. Bain Capital, an owner of Sensata, got a lot of bad press because it flew a crew of Chinese workers to Freeport, where the American employees — all of whom were being laid off — were compelled to train the untrained, low-wage Communists who were taking their jobs.
All this publicity, however, overlooked the terrific logistical aspects of this offshoring saga. Not only were about 100 jobs moved overseas; every important component of the manufacturing process, including machines, test equipment, office furniture — the works — were rolled into containers, trucked to the West Coast, stacked onto container ships and transported more than 7,000 miles. This is a feat once unthinkable and certainly too costly to accomplish in a past era that didn’t have a supply chain so efficient as today’s.
One has to simply stand back, look objectively past the human tragedy of Sensata and say, “Far out!”
Even more remarkable is that many customers for Sensata’s sensors, which go into cars, RVs, airplanes, heating and air conditioning systems and mobile phone networks live right here in the U.S.A. Before its operations were moved to China, a Sensata truck driver could climb into a Dodge van and haul a half-ton of automotive sensors, switches and control devices from Freeport to the Chrysler plant over in Belvidere, Ill., in about 50 minutes — most of the trip on legendary US Route 20.
As of next year, that same shipment — now from Shanghai to Belvidere — will take… well, not being well-versed in supply-chain stuff, I really don’t know how long it might take. But more than 50 minutes, I bet.