Industrial and Machinery | Equipment industry
As a senior leader or executive in the industrial and machinery industry, you understand the critical importance of a robust global supply chain, from sourcing through manufacturing to distribution, to your business success. However, with rising complexity, increased cost pressures, and global disruptions, it has become more vital than ever to review your manufacturing and distribution operations.
Here are six key trends to consider from an end-to-end supply chain, operations, and footprint perspective:
1. Growing complexity of global supply chains
From sourcing through manufacturing to distribution with longer lead times and increasing risks to manage.
2. Need for enhanced upstream and downstream supply chain visibility
To better manage inventory and rapidly respond to demand changes.
3. Urgency to streamline operations
To offset rising costs and enhance profitability.
4. Need to de-risk operations
By reducing dependence on single sources or regions and manage supply chain disruptions.
5. Pressing importance of sustainability
As stakeholders demand greener and more responsible operations.
6. Necessity for digital transformation
To monitor, analyze, and optimize the installed base and overall supply chain performance, including the adoption of new manufacturing technologies.
One significant lever is to review your manufacturing and distribution footprint, assessing your current operations to identify opportunities to enhance efficiency and profitability. This could involve consolidating and/or relocating production facilities, outsourcing specific operations, or investing in new technologies to improve productivity. An additional driver for companies to review their manufacturing footprint is the pressure on labor availability (quantity and quality) in many locations around the globe.
Footprint strategies are critical for companies seeking to adapt to changing market conditions and improve their competitive position. By taking a strategic approach to their manufacturing and distribution operations, senior leaders and executives can ensure their businesses are well-positioned for success in the years ahead.
It is essential to address the balance of sourcing and manufacturing in China versus other geographies, as China's manufacturing dominance has reduced due to geopolitical risks, higher costs, and increased competition. A well-based approach to balancing and potentially decentralizing sourcing and manufacturing in different regions can help you to minimize risks and benefit from the strengths of each region.
In conclusion, now is the time for senior leaders and executives to review your company’s global manufacturing and distribution operations and supply chain. By doing so, you can remain resilient and agile in the face of increasing complexity, cost pressures, and global disruptions. Implementing sound footprint strategies can optimize your operations, enabling companies to succeed in the ever-changing industrial and machinery industry.
