Regional sourcing and the regional shortening of supply chains continues to gain popularity in response to global supply chain challenges.
Case in point, as costs climb in low-cost manufacturing regions of the world, Canadian automotive supplier Magna International Inc. is increasingly looking to localize supply and leverage efficiency improvements to drive cost savings in its supply chain, according to a report in the Automotive News.
Carrie Van Ess, vice president of procurement for the Americas at Magna, commented that a new regional supply chain model is emerging,in which products are produced, sold and consumed in the same geographic region. She was speaking at the 2014 Management Briefing Seminars.
Magna is focusing on reusable packaging and transportation improvements as a source of cost advantage, saying that improved design of reusables allows better fill rates in transport vehicles, and more attention to routing is allowing it to minimize unused space on trucks.
Van Ess stated that the Magna philosophy is that no empty trucks and no empty containers equals the lowest cost possible.
Generating around 8,000 shipments weekly, Magna offers a broad range of automotive parts and components. The company registered global sales of $34.3 billion in 2013, ranking it No. 3 on the Automotive News top 100 global suppliers list.