WT100 Blog

Are You Tapping into the Upstream Supply Chain?

February 26, 2013
/ Print / Reprints /
/ Text Size+

It’s now possible for companies that ship more than 50 containers a year to get the same advantage WalMart does on distribution. That breakthrough comes when you make use of the upstream supply chain.

By pushing labor upstream and moving distribution offshore – close to where their manufacturing is done – companies can realize dramatic savings. WalMart does it. Apple, too. Even the Mormon Church packages The Book of Mormon, which is printed in China, and ships directly to customers in the U.S.

A company that sells custom-made store fixtures like display stands and end-caps to Fortune 500 businesses, one of ICAT Logistics’ customers, utilizes the upstream very efficiently.

Parts for the customized fixtures are made offshore. In the past, they shipped to the U.S. West Coast, where the fixtures were assembled to meet clients’ specifications. Using the upstream supply chain concept, the “made to order” part of this process has been moved closer to the factory where the units are being manufactured.

Now, when the container arrives in the U.S., it is immediately forwarded on to its destination.

Among the benefits for this business, and others using the upstream supply chain:

  • Lower labor costs
  • Greater efficiencies after delivery
  • Less pilferage
  • Reduced damage
  • A ‘greener’ solution
  • A tax advantage

The tax savings occur because the customer is not carrying inventory, since the unit arrives in the U.S. pre-packaged for shipment. Since the unit comes out of the container ready to be sent directly to the customer, no inventory tax is assessed.

The upstream supply chain is worth considering if you ship more than 50 to 100 containers a year, particularly if your transactions are direct to a consumer base or a retail end user.

Why not make like a salmon and see the benefits of swimming upstream? Are you tapping into the upstream supply chain?

You must login or register in order to post a comment.



Image Galleries

KC SmartPort Momentum

Kansas City SmartPort Momentum 2013 focused on 3PLs, the issues facing the industry, and the role or logistics in economic development


Assurance of Supply: A Top Concern for Manufacturers

Every manufacturer has an assurance of supply problem to some extent due to the complexity of global sourcing. For years, manufacturers were blessed with high margins but margins have grown paper thin. You can’t fill up your distribution centers with excess inventory – not only is there a cost factor but the pace of business and consumer buying trends causes goods to quickly turn obsolete. Assurance of supply provides the speed and agility that is essential to being able to compete in today’s market.


Speaker info: Diane Palmquist, VP Manufacturing Industry Solutions


More Podcasts

World Trade 100 Magazine

wt september 2014

2014 September

Check out the September 2014 edition of World Trade WT100, featuring the 2014 Logistics Directory, plus much more!
Table Of Contents Subscribe

Transportation Capacity

As peak season has gotten underway, what is your experience with transportation capacity?
View Results Poll Archive


World-Class Warehousing and Material Handling, 1st Edition

Filled with proven operational solutions, it will guide managers as they develop a warehouse master plan, one designed to minimize the effects of supply chain inefficiencies as it improves logistics accuracy and inventory management - and reduces overall warehousing expense.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Use our interactive maps to locate service providers across North America.Interactive Map

Logistics Development Partners 

IWLA Members