Manufacturers typically evaluate seven critical areas when it comes to operational decision making: transportation and energy costs; market demand for their products; rising labor costs in China and other developing nations; access to talent, tax and regulatory policies; availability of capital; and currency trends.
A push to reshore apparel manufacturing and technical skills is steadily taking hold in the United States. Industry organizations, as well as academe and suppliers, are identifying areas for job creation, inventing new ways to think about apparel production and building incubators that nurture a budding apparel workforce via expert tutelage and business advice.
Investors and multinationals are increasingly turning their gaze southward to the ten dynamic markets that make up the Association of Southeast Asian Nations (ASEAN).
These are challenging times for emerging markets. China's economy is expanding at the slowest pace in more than a decade, and annual growth in once-booming nations like Brazil, Mexico, Russia, and South Africa has slowed to about 1.5 to 2.5 percent. Look around the developing world, and currencies are weakening, worries about asset bubbles and rising debt are mounting, and foreign direct investment has fallen sharply. This volatility leaves many companies wondering if they are overexposed to the risks of emerging markets.
For every company that thrives in a foreign market, probably five companies stumble. The complexities of entering a foreign market can result in many strategic mistakes and missteps. Even businesses that eventually "win" in a geographic region can teeter on the edge for years.
Over the past few decades, the electronics components industry has seen countless companies pursue production overseas in an effort to reduce costs. OEMs have gone abroad to find the best value-added locations for building boards via offshoring: mainland China, Southeast Asia, and more recently Eastern Europe. However, this trend is shifting.
A growing chorus of economists, engineers and business leaders are warning that the evisceration of the manufacturing work force over the last 30 years might not have scarred just Detroit and the Rust Belt. It might have dimmed the country's capacity to innovate and stunted the prospects for long-term growth.
Analyst Insight: 2011 marked a watershed year in the way supply chain managers conceived of global practice. Natural disasters that shook up traditional global sourcing coupled with a growing willingness to rethink the value of lowest piece-part pricing led companies to reassess what it means to operate efficient, effective supply chains. Companies are rethinking and reconfiguring supply chains to be more rational, regional, practical, low in total cost and risk, and high in fostering quality and customer value - moving toward rational, lean value streams. - John Shook, chairman and CEO, Lean Enterprise Institute