According to the German supply chain consulting firm BrainNet, the continuing low exchange rate for the dollar is encouraging many in Europe to look across the Atlantic for alternate procurement opportunities. This is especially so for industry sectors heavily dependent on exports to the dollar area, such as the automotive industry, the aircraft industry and machine construction. It is thought that a currency-related fall in revenue could be at least partly offset by shifting more procurement to the dollar area.

In addition the article noted that areas that we take for granted here in the states are now being seen as affordable value added benefits. We have little to no communication and cultural barriers between us and Europe making it considerably easy to make adjustments or changes if required. Our emphasis on the protection of intellectual property, which in many parts of the world is a serious problem, is another considerable benefit. This is of vital importance to many companies, which are being forced into ever-closer links with their suppliers in the face of declining vertical integration. Finally, the excellent infrastructure in place in the U.S. presents another attractive prospect for European procurement departments. Companies that do business with North America benefit from first-class conditions in terms of communication and mobility.

Case in point is another client of ours who is reaping the benefits of the United States new found cost competitiveness. They are now producing precision machined printer components for a major printer company in Israel. Their customer ships some components produced in Israel to my clients location for additional processing, machining of additional components, and assembly.  Recently, their customer has decided to shift even more work than previously committed due to the company’s price competitive services coupled with their excellent quality and delivery track record. What is more significant is that the final assembly of the printers is not even being performed in North America. The machined and assembled printer components are shipped back to Israel for final assembly.

This is the type of work that American companies were dramatically losing as recently as three years ago. There are a few silver linings sparkling in those dark clouds everyone is talking about.