Today was another beautiful day in Denver, but inside the convention center, conference attendees were busy trying to decide which of the day's 26 tracks they wanted to attend. In addition to the educational tracks there were tours of King Soopers' fully automated distribution center and the state of the art BNSF yard.
Tuesday's keynote address was delivered by Peter Carlsson, Vice President of Supply Chain for Tesla Motors. He discussed the supply chain situations he has faced - how to rethink an extremely competitive logistics system, the challenges of building an electric car in a gasoline driven world, and creating, managing, and executing a supplier infrastructure of more than 200 relationships who are expected to meet very exacting criteria. As a visual bonus, there was a gleaming 2014 Tesla sedan on the exhibit floor - a beautiful car.
There were a number of interesting tracks available, but I selected one entitled "Right Sourcing - Why Mexico Makes Sense". It was a very informative discussion of Mexico's logistics assets. Some of the key points were:
- According to a recent survey, 84% of the companies surveyed were looking at re-shoring or near-shoring with Mexico and the U.S. the most attractive countries.
- Mexico has favorable wage rates. By 2020 the average hourly wage rate will be $5.20, compared to$7.60 in China and $30.00 in the U. S. The Mexican workforce is young, with a median age of 26.6 compared to 37.2 in the U.S.
- Mexico has a good infrastructure, and English is widely spoken.
The most publicized issue of course, is security; but the panelists felt that if businesses took the proper precautions, security should not be a major issue. Cargo thefts apparently are declining, as well.
For more on this subject, see the article entitled "Not Your Father's Mexico" in the October, 2013 issue of American Shipper.
The conference ends on Wednesday morning. It was well attended and well organized, and the Denver Convention Center was an excellent venue. The total program was heavily skewed toward technology; and for those interested in transportation, warehousing, and inventory management, there were fewer sessions. However, given the fact that we are certainly in a technological age, there were numerous opportunities to learn more about the application of technology to the supply chain.
P.S. The Tesla will cost you $70,000.