May 16, 2020

US-China trade dispute urges US factories to relocate during next year

US
China
Manufacturing
China
Sean Galea-Pace
1 min
The US-China trade dispute is encouraging American multinational firms to move their factories and adapt business strategies during the next 12 months...

The US-China trade dispute is encouraging American multinational firms to move their factories and adapt business strategies during the next 12 months, according to CNBC.

Speaking to CNBC’s Squawk Box, Gerry Mathios, vice president of consulting firm Bain, said: “The shift is happening. Back at the end of 2018, when we ran a similar report, we found out a lot of companies — over 50% — were actually sitting on the fence ... there were no major actions taken.”

Despite China’s significant cost advantage that saw them rise to the top of the world’s manufacturing hub, it is believed that advantage is decreasing due to costs rising.

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Following a survey by Bain and Company which polled over 200 high-level executives and senior supply chain officers at US multinationals with operations in China, 60% of respondents confirmed they are ready to take action.

“They see customers having to pay part of it, and they are trying to see how to reassess their supply chains,” added Mathios.

It is expected that some manufacturing will remain in China as the country transitions to becoming a consumption-driven economy.

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May 12, 2021

Gartner: Leaders Lack Skilled Smart Manufacturing Workers

SmartManufacturing
DigitalTransformation
DigitalFactory
ConnectedFactory
2 min
57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support smart manufacturing digitalisation

With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.

While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.

“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.

“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”

Change Management

Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.

“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.

Technology and People

While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.

“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.

Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.

Discover Gartner's Five Best Practices for Post COVID-19 Innovation' in manufacturing.

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