Decision Time for Manufacturing Industry ?

I came across a well written report by Booz & Co this week on the crossroads at which Manufacturing Industry finds itself in the US at the current time.  I have for a long time been a strong supporter of the view that a strong economy is built on the back of a strong manufacturing sector and there are some good insights in the report as to why these links are important.


The report also looks at the subtle shift that is taking place in manufacturing sectors over the decisions making criteria that are being used to decide where new manufacturing infrastructure will be located.  Labour cost have often been cited as the reason for moving an organisations manufacturing base but there are more and more organisations that are looking to the skills of the employee base as being the key driver due to the ever increasing technicality of the manufacturing equipment being used.  Associated with this, is the location of "clusters" of similar types of operations resulting in pockets of higher skilled labour and the back up of related service and supplier industries in the area.


Another driver that is increasing energy costs that result in a shift in the balance of "delivered" costs away from the influence of employee costs and becoming mush more influenced by the distance to market.  The final driver is taxation policy and regulation within the region. 


Overall, the report makes for very interesting reading and whilst focused upon US manufacturing, there are many overlapping issues for manufacturing industry globally.


Read the report here.


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