Talent, Technology Keys To Manufacturing Investment

Nations with a strong talent pipeline and access to technology, education will see increased manufacturing investment, says a new report from Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI).


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Nations with a strong talent pipeline and access to technology, education will see increased manufacturing investment, says a new report from Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI).
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Talent, Technology Emerging Keys To Manufacturing Investment

Talent, Technology Keys To Manufacturing Investment

South Africa, Turkey, and Vietnam are emerging as targets for manufacturing investment, according to a new report, “Footprint 2020: Expansion and optimization approaches for US manufacturers.” The report, published jointly by Deloitte and the Manufacturers Alliance for Productivity and Innovation (MAPI), 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 asked companies to project where they will be making investments in their manufacturing footprint in the coming 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.

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Credit: MAPI and Deloitte Global Manufacturing Footprint 2020 Study

Dominant manufacturing sites in Asia and South America are expected to continue to experience a steady inflow of project investments, according to the report. In parallel, China and the U.S. are expected to receive the highest number of investments by manufacturers planning to optimize operations in countries with existing activities. South Africa, Turkey, and Vietnam 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 will 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.”

For more information, visit Deloitte and MAPI’s Footprint 2020 study.

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