Harnessing the Tectonic Shifts in Global Manufacturing
Most manufacturers are relocating production and sourcing, but only 55% say the moves met their goals; a market-back, five-step footprint strategy that weighs landed cost against resilience can cut manufacturing and supply-chain costs by 20% to 50%.
Summary
Over 90% of North American manufacturers surveyed moved production or sourcing in the past five years and plan to again; US imports from China fell 10% in 2018-2022 while those from Mexico, India and ASEAN rose 18%, 44% and 65%. Yet only 55% met their objectives, mostly through piecemeal decisions and neglect of non-cost factors. BCG recommends a market-back approach in five steps: set strategy, build end-to-end visibility, compare landed costs, weigh location tradeoffs and clarify governance.
Editor's opinion
Most firms are moving production and sourcing, but only about half meet their goals; a market-back approach to footprint design improves results.
Key concepts
Market-back approach · Five-step footprint strategy · Landed-cost comparison · BCG Global Manufacturing Cost Competitiveness Index · Resilience versus cost