Shifts in Location Drivers to Shape Global Manufacturing Landscape


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A new report, “Footprint 2020: Expansion and optimization approaches for US manufacturers,” examines the trends driving global manufacturing footprint shifts, and explores the next generation of locations manufacturers are considering as markets and strategic imperatives evolve. It also highlights optimization strategies manufacturers should consider.

The survey, jointly conducted by Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI), asked companies to project where they will be making investments in their manufacturing footprint in the next five years and how drivers for these investments are shifting. According to more than 50 companies surveyed, countries with a strong talent pipeline that can provide access to the latest technological advances and educational infrastructure are projected to see increased investment.  This observation represents a shift from a traditional focus on Regulatory Climate and Physical Infrastructure.

According to the Deloitte-MAPI report, dominant manufacturing sites in Asia and South America are expected to continue to experience a steady inflow of project investments. In parallel, China and the United States are expected to receive the highest number of investments by manufacturers planning to optimize operations in countries with existing activities. The report indicates locations emerging as targets for investment include South Africa, Turkey and Vietnam. These markets are increasingly drawing attention due to their growing middle class and rising spending power. Meanwhile, while some respondents appear to lag in terms of their entry into Brazil, China and India, many plan to expand their footprint into these markets in the coming years.

“Many emerging markets are currently investing heavily to improve their technology infrastructure and boost their educational programs to support evolving manufacturing needs,” said Matt Highfield, director, Deloitte Consulting LLP and co-author of the report. “Ultimately, these efforts can allow them to become increasingly competitive on the global stage, especially at a time when developed economies continue to battle the challenges of an aging workforce.”

As manufacturers contemplate entering new markets, expanding existing manufacturing locations, or reshoring portions of their production, the optimization of their footprint strategy will necessitate flexibility. To keep pace with today’s complex environment and ensure their assets are aligned to changing market conditions, they will have to consider forward-looking footprint strategies as they manage their production footprint.

“Entering a new, up-and-coming market can be alluring, but single location expansion shouldn’t be considered in isolation,” suggests Jennifer Callaway, council director at MAPI and co-author of the report. “Manufacturers can better position themselves for success by making growth and expansion decisions within a dynamic strategy that encompasses their entire footprint.”

Survey Methodology

MAPI and Deloitte conducted the 2015 Footprint 2020 study online. Over 50 companies responded to the survey. The average revenue range of participants is $500 million to $10 billion, and the average employee count is 1,000 to 10,000 employees.

About The Manufacturers Alliance for Productivity and Innovation (MAPI)

MAPI is a member organization focused on building strong leadership within manufacturing, and driving the growth, profitability, and stature of global manufacturers. MAPI contributes to the competitiveness of U.S. manufacturing. MAPI provides the timely and unbiased information that business executives need to improve their strategies, boost productivity and drive innovation.

About Deloitte Consulting LLP

Deloitte's process and industrial products practice serves over 80 percent of all Fortune 1000 process and industrial products companies, which include market category leaders in chemicals, metals, industrial goods and paper products.  

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