Managing risk is not only an important supply chain concern. How well countries can mitigate risk also factor into business investment and manufacturing relocation or expansion decisions.
According to the latest Cushman & Wakefield's Where in the World? Manufacturing Index 2015, Asia Pacific countries have nailed this and remain a powerhouse region for manufacturing when compared to other geographies.
Asia Pacific, not surprisingly, took nine of the top 13 index spots, with Malaysia, Taiwan, and China ranking first, second and third. This is the second year running that Malaysia has secured the top position, benefitting from its cost-effective environment. Korea, Singapore, Thailand, Indonesia, Japan and the Philippines–significant hubs for the high-tech sector–had top showings as well. Though not on the main 30-country list, Vietnam topped Cushman & Wakefield's Growth Index, and its continuing push in its retail market presents opportunities to retailers and manufacturers of fast-moving consumer goods, the report notes.
In other regions, Turkey took the lead for the Europe, Middle East, and Africa region coming in at eighth place overall. And, United States turned some heads, jumping five spots to fourth place, making it the highest-ranking country in the Americas.
Mark Wanic, Cushman & Wakefield's head of occupier services in the Americas, said in a statement, “There is a genuine sense that manufacturing is now making a comeback in the U.S. as global demand appears to have turned a corner. The cost differential to cheaper markets, which contributed to a number of manufacturers moving 'off-shore,' has now narrowed –with the U.S. regaining a competitive edge.”
“A more competitive energy platform, both in terms of cost and security, is adding to the U.S. as a manufacturing location. In addition, supply-chain management is also collectively adding to the more positive outlook evident from our latest index ranking,” he added.
The index ranks the 30 largest countries by manufacturing output, defined by the United Nations Conference for Trade and Investment (UNCTAD). According to Cushman & Wakefield's, this year's rankings were assessed according to costs, risks and conditions, which are further broken down into sub-categories that translate into more than 30 individual datasets, including labor costs, where to source raw materials and whether the facility needs to be close to a port or an airport or both.
The Manufacturing Index shows how two dynamics are playing out. On one hand, with customer expectations continuing towards immediate and highly customized products, companies (and countries) are under pressure show their adeptness in mitigating risks within manufacturing and supply chain operations. Simultaneously, companies factor into their relocation or expansion strategies how well counties weather individual market conditions, prevent or avoid risks, remain cost effective and meet changing global consumer demand.
What factors does you company consider when relating or expanding manufacturing facilities?