More Than 90% Of North American Companies Have Relocated Production And Sourcing Over The Past Five Years
In the last five years, global manufacturing and sourcing have experienced significant upheavals due to trade disputes, the pandemic, geopolitical tensions, and supply chain challenges. Boston Consulting Group (BCG) has released a report titled "Harnessing the Tectonic Shifts in Global Manufacturing," highlighting these transformations.
BCG's survey of North American manufacturing executives and global trade data reveals that over 90% of companies in the region have relocated some production or supply chain operations in the past half-decade, with half moving over 20% of their expenditures. This trend is anticipated to persist, driven by ongoing geopolitical uncertainties and high US tariffs.
Countries like Mexico, India, Southeast Asia, Turkey, and Morocco, with substantial labor resources and expanding capabilities, are emerging as significant players in this shift. For instance, between 2018 and 2022, US imports from China decreased by 10%, while imports from these regions grew significantly.
Cost reduction remains the primary motivator, but respondents also prioritize shorter lead times, stability, and flexibility, even if it means sacrificing operating margin points. However, only 55% reported that their production changes met objectives related to cost reduction, lead time improvement, or sustainability goals.
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