The Manufacturing Belt may change into a Manufacturing Spider Web soon because manufacturers are planning on fragmenting and moving their operations closer to their customers.
The Manufacturing Belt, or Rust Belt as it’s sometimes called, is spread across several states in the Northeast United States. It includes notable manufacturing cities like Cleveland, Detroit and Pittsburgh. The reason this area became so focused on manufacturing is because coal and other natural resources were located in this part of the country, making it convenient for manufacturers to set up shop near their suppliers.
The Survey Says
But all that is about to change, according to a recent survey by Accenture, entitled “Manufacturing’s Secret Shift.” The survey says:
– 61 percent of the manufacturers in the survey are considering relocating their operations closer to their customers so they can improve their delivery times.
– 49 percent of North American manufacturers in the survey are concerned about delivery times because they manufacture many of their products overseas.
– The three biggest factors in manufacturers’ decision of where to locate their operations are labor (74 percent), distance to customers (67 percent), and local workers’ skill level (61 percent).
If the Price Is Right
To deal with inflation and the rising prices of raw materials and employees, many manufacturers have already moved away from the Manufacturing Belt. Many went to states and countries with lower taxes and cheaper labor. But as the U.S. dollar has weakened against other currencies, it’s becoming more expensive to do business outside the United States. Plus, customers want more immediate service, so having to wait for products to be shipped from faraway locations isn’t appealing.
The price of staying far away from customers to save money is getting a little too high for manufacturers. However, moving closer to customers involves new risks and costs that must be dealt with.
If manufacturers are far from their suppliers, they need to step up their supply chain management to make sure they don’t fall behind on their order fulfillment. The whole point of moving closer to their customers is to deliver products faster, but if they’re unable to make products because it takes too long to get supplies then that would defeat the whole purpose of moving.
One way to keep manufacturers’ supply chains running strong is to use manufacturing inventory software. This software allows manufacturers to track products from the moment they’re ordered to the moment they’re received. Manufacturers can find out which suppliers are the most dependable and cultivate strong relationships with them. Manufacturing inventory software can also track inventory in multiple locations and monitor products being shipped to customers.
As you try to decide where to base your manufacturing business, use manufacturing inventory software to make sure your decision won’t jeopardize your supply chains.