In today’s quickly evolving global economy, manufacturers must contend with many issues affecting profitability. The location of manufacturing operations is one of the most basic, strategic decisions. In efforts to control production costs manufacturers have often outsourced labor intensive processes to nations with typically low wages. This has sometimes caused a consumer backlash as poor working conditions in some emerging countries gain exposure. Public sentiment, plus changing economic factors are causing many manufacturers to reexamine their outsourcing policies. As speed of delivery becomes more important, proximity to the consumer gains in priority, just as the ease of doing business, availability of skilled workers and reliable supply chain are factors influencing re-shoring trends.
As manufacturers struggle to find the appropriate balance between low cost suppliers and escalating customer expectations, plant location is a hot topic of debate.
This complex task of closing, moving, and establishing new locations causes numerous logistics and supply chain challenges for manufacturers. In this brief, we’ll explore the driving factors in smart plant location and discuss how modern ERP solutions, particularly cloud deployment, play a role in agile response to changing global conditions.