More Than 90% Of North American Companies Have Relocated Production And Sourcing Over The Past Five Years

By Author: Orson Amiri
Total Articles: 401
Comment this article

Over the past five years, global manufacturing and sourcing have undergone significant transformations due to factors like trade conflicts, the pandemic, geopolitical tensions, and supply chain disruptions. A recent report by Boston Consulting Group (BCG) titled "Harnessing the Tectonic Shifts in Global Manufacturing" underscores the profound impact of these changes.

The report, based on a survey of North American manufacturing executives and trade pattern analysis, reveals that over 90% of companies in the region have relocated parts of their production or supply chains in the past five years. About half of them have shifted more than 20% of their manufacturing and supply chain expenditures. This trend is expected to continue, driven by ongoing geopolitical uncertainties and high US tariffs.

Mexico, India, Southeast Asia, Turkey, and Morocco are emerging as key manufacturing hubs due to their abundant labor pools and growing capabilities across industries. For instance, between 2018 and 2022, US goods imports from China dropped by 10%, while imports from Mexico, India, and ASEAN countries surged.

The primary ...
... driver behind these shifts is the pursuit of cost reduction, but survey respondents also prioritize shorter lead times, stability, and flexibility in responding to disruptions, even at the cost of margin points. On average, they are willing to sacrifice over 2% of gross margins for these benefits.

Despite these efforts, only 55% of respondents reported that their production moves have achieved their objectives in terms of cost reduction, lead time improvement, or sustainability goals.

Read More - https://www.techdogs.com/tech-news/pr-newswire/more-than-90-of-north-american-companies-have-relocated-production-and-sourcing-over-the-past-five-years