Trend 2
Near Shoring

 Sourcing closer to end markets or "Near-shoring" is emerging as a megatrend. This sourcing trend refers to moving a business function to a country that is closer in either geography, time zone, cultural characteristics and empathy, quality of work, or economic structure to the company's home country as a means of cutting costs and improving services.

North America and Eastern Europe are some of the key regions experiencing this shift. Manufacturers are rethinking more often their overseas manufacturing positions because the offshore advantage of labour arbitrage is decreasing.

And a growing number of manufacturers are now realizing that the physical location of supply and manufacturing operations can have a significant impact on the overall competitiveness. Near-shoring offers the opportunity to maintain a high level of control while mitigating the cost of doing business.

"Supply chain risk management continues to be a key issue at board level for manufacturing companies. Many of them are already using near-shoring as a strategy to manage aspects of that risk. However, in our experience, very few companies have a fully integrated supply chain risk management process addressing all the elements of supply chain risk: supplier failure; continuity of supply; counterparty risk and regulatory risk." - Volker Zieske, Partner, Assurance Services

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Trend 3
Demand Shift to the East

The global manufacturing sector is undergoing a change as major shifts in demand can be noticed. The accelerating shift of powers from West to East has moved the engine for growth in the global economy from developed to emerging countries.

Large and growing populations, a rising middle-class consumer society as well as increased urbanization will drive demand in Asia. Major established Asian economies (e.g. China, India) and new upcoming markets (e.g. Indonesia, Vietnam, etc.) are driving global growth.

Over the past few years, the share of these economies in the global "Gross Domestic Product" (GDP) has been increasing rapidly while mature markets like the US and Europe continue to witness slower recovery.

"New customers often require very different products to meet their needs, with different features and price ranges, forcing manufacturers to offer a wider range of products and services. This will also drive the growth of both production as well as research in Asia." - Tim Löbig, Partner, Consulting - Strategy & Operations

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