@Risk

China is exposed to significant natural threats, including earthquakes, windstorms, floods and tsunamis, and a new study from FM Global revealed there is growing concern that a natural disaster in China will have a severe impact on supply chains –even more than the 2011 Japan earthquake and tsunami did.

The FM Global Supply Chain Risk Study surveyed 100 financial execs at large multinational corporations and found that: (more…)

Rising labor costs and quality concerns have many US companies reevaluating their overseas strategies.

In fact, new research conducted by Cook Associates Executive Search found that a full 85 percent of manufacturing executives see the possibility of  certain manufacturing operations returning to the US.

What are the reasons for this potential shift? Survey participants cited:

• overseas costs (37 percent)
• logistics (19 percent)
• other, including economic/political issues, quality and safety concerns, patriotism and overseas skills shortages for highly technical manufacturing processes (36 percent)

The study, which polled nearly 3,000 manufacturing executives primarily in small- to mid-sized US companies from October 13 through November 18, 2011, identified low-volume, high-precision, high-mix operations, automated manufacturing and engineered products requiring technology improvements or innovation as the primary forms of manufacturing returning to the US. (more…)

The semiconductor industry heard some welcome news last week.

Despite a challenging global economy and natural disasters that impacted production in Asia, the Semiconductor Industry Association (SIA) said it expects continued growth in 2011, 2012 and 2013.

More specifically, the SAI endorsed the World Semiconductor Trade Statistics (WSTS) organization’s Autumn 2011 global semiconductor sales forecast which has projected semiconductor sales to grow to $302 Billion for 2011. If that forecast holds, it will be the first time semiconductor sales have reached the $300 Billion mark and will represent a 1.3 percent growth rate over the record-breaking year in 2010.

WSTS tabulates its annual forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.

Beyond 2011, the WSTS expects steady, modest growth: a 3.7 percent increase for 2012, and 5.8 percent increase for 2013. (more…)

Analysts are forecasting continued global economic volatility in 2012, so it makes sense for forward-thinking companies to bolster their focus on improved efficiencies and the mitigation of supply chain risks.

Recent research from IDC Manufacturing Insights confirmed that many Asia/Pacific manufacturers are doing just that. Drilling down even further, the IDC Manufacturing Insights report, Asia/Pacific Manufacturing 2012 Top 10 Predictions, concludes that in 2012 there will be greater use of predictive analytics tools among the region’s manufacturers.

Why? Because countering supply chain risks now requires better decisions at strategic and tactical levels –the kind of decisions made possible by predictive analytics, automation and enhanced supplier collaboration.

Noting that countries in the West are battling sluggish economies and high unemployment rates, IDC Manufacturing Insights also predicts that Asia/Pacific manufacturers will focus on producing goods where there is demand and growth – domestically, in the Asia/Pacific region. (more…)

Many companies are focused on emerging markets to fuel growth. But in order to achieve success, these companies typically must clear numerous –and sometimes daunting –hurdles.

For example, Deloitte recently surveyed business leaders from companies expanding into developing economies. They said their primary challenges to increasing revenues in emerging markets are:

• providing products and services at affordable prices that meet customer needs (43 percent)
• competition from local businesses (40 percent)
• brand awareness in the market (40 percent)
• navigating protectionist policies and government bureaucracy (39 percent)

Clearly, each individual business situation is different, and so each company that eyes expansion into emerging markets must carefully weigh options and design strategies around the special requirements of each country’s consumer and regulatory environments.

The Deloitte study found companies with successful emerging markets operations implement certain strategies to generate revenue. They: (more…)