Global supply chain specialist, Michael Hetzel, talks to Tecma about looking at the short and long term horizons.

Tecma Group of Companies:

Hello and welcome to another installation of Tecma Talk podcasts. If you are a repeat listener to these recordings, you know that Tecma Talk podcasts consist of conversations with experts that are both internal and external to the Tecma Group of companies. We talk about manufacturing in Mexico, and things that are related. Today is no different. An external expert is with us. His name is Michael Hetzel. Michael is an individual that has voluminous experience as a global supply chain specialist, and will speak to us today with respect to supply chain and its function.

Michael, how are you ?

Michael Hetzel:

I’m doing well. Thanks for having me in.

Tecma Group of Companies:

Michael, just so that the individuals that are listening to this podcast have a bit of a frame of reference from the perspective from which you speak, can you please provide us with a little bit of information about your personal and professional background?

Michael Hetzel:

I’ve spent eighteen years in manufacturing. Nine and a half of those were as the CEO of a metal stamping and injection molding company serving markets in automotive, electronics, telecom and so forth. We grew that company four hundred and eighty percent and sold it to a publicly traded company. I have spent the last thirteen years as vice president of business development for this hemisphere for a third-party quality services firm. We were providing services in thirty-eight countries. That assignment ended just this July. Along the way, I’ve also conducted a speaking practice. I make presentations to various groups, and also I publish articles on global trade, and supply chains and quality. Some of the groups include the North American Die-Casting Association, the Society of Manufacturing Engineers and others. I’ve spoken in five countries, so far, and, at this time, I am in transition and looking for my next exciting assignment in international trade.

Tecma Group of Companies:

That is a good thing for people that are listening to this Tecma Talk podcast to know, considering the fact that the experience that you have in this area is vast. For today’s discussion, we have five questions that we are going to look at. The first among them that I would like to pose to you, Michael, is: From your perspective, what are the most significant changes that are currently occurring in global supply chains?

Michael Hetzel:

Well, there are two tracks that are associated to what I am seeing in the supply chains. One track is related to the idea of short-term visibility, or the near term horizon, while the other has to do with the longer term horizon.

In the short-term, people are seeing a decrease in oil prices, which was impacting their overseas costs rather than their nearshore costs (in this market anyway). Unfortunately, in some cases, people tend to think that this is going to last forever. It’s like at one time, not long ago, they thought that high bunker charges, and so forth, were going to last forever. With respect to the longer term view, companies are adjusting their supply chains and architecture to reflect a longer term view of manufacturing their products in proximity to market. This is something that I have advocated for many years. Sometimes this means having supply chain elements that are comprised of the same inputs in several countries. In short, there is a lot of change going on. In the US market, for example, many companies are pulling back in from Asia. A couple of recent studies by AlixPartners and KPMG show that, overall, Mexico is a lower cost location to manufacture for the

US market than China is. From our experience, this is absolutely true, although Mexico has the constraint of a narrower availability of categories compared to some of the other Asian countries, particularly China. This issue can be [...]