The doors of perception

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Logic says that is madness to drive 20 miles to fill up with fuel simply because it is a penny a gallon cheaper – the cost of the journey must outweigh any financial benefit. Nevertheless, I am told by oil industry experts that there are indeed people who will do this.

It certainly highlights the impact that fuel prices have on people’s lives. So, one of the findings of a new survey of 200 companies by Barclays Bank should not be a surprise.

It found that the costs associated with transporting goods are impacting manufacturers’ decisions when choosing suppliers and where they supply to.  Some 65 per cent said cost was influencing their supply chain decision making with a further 11 per cent saying their decisions are being heavily impacted.

It’s just one of the factors that supports the view that companies are increasingly looking at on-shoring. Issues such as currency risk were also raised by manufacturers.

When companies first started looking at off-shoring, the transport cost was considered far less significant than the saving that could be made by manufacturing in, for example, China.

So has the balance of cost really swung back that much? It seems unlikely to me. Balance of perception? Well that’s another thing…

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