Manufacturing Insights

New Challenges for Manufacturing

Manufacturing StrategyThe economics of manufacturing is changing as new trends emerge.  Energy costs are changing and also declining in the United States which is great for manufacturers. The labor cost gap between developing nations and undeveloped nations is shrinking. New technologies including advanced robots and 3D printing is effecting the landscape for global manufacturing companies.  This can be challenging because many questions arise on how to remain competitive and how to provide the most value from a firms supply chain.

Many companies are asking if they should re-shore because of the changing costs in labor and energy. Only a very small part of the new challenges to manufacturing is driven by labor costs and energy costs. Companies need to start thinking about what will be driving business decisions in the near future.  For companies to remain competitive in 2 year and even up to 10 years, they need to beginning managing for the next economic landscape.

Manufacturing strategies will need to become focused on adopting flexible supply chains. Learning what product segments need to be manufactured near demand will be critical as emerging markets overtake demand in developed nations.  The supply chain ecosystem is a bit confusing for many businesses as investments need to planned and focused around demand. Proximity to demand and establishing the necessary training through community colleges to build the needed work force and the necessary partnerships will become the most fundamental driver of value creation.

Recently a manufacturing facility was moved from Mexico to the United States in order to take advantage of these trends in the value chain.  This facility needed to be not only close to demand but needed to be able to access new technologies for better operations.  Collaboration with customers are critical as markets in the united states seek more variety and specialized goods. This changes manufacturers to focus on process innovation and to seek out the new technologies all over the globe to incorporate them into their value chain.

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