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Global Manufacturing

In: Business and Management

Submitted By carloszepeda
Words 1770
Pages 8
Essay #1—Global Manufacturing

In this essay, I will be discussing the emerging trends that will affect manufacturing in the upcoming years. I will begin with focusing on the global nature of manufacturing and supply chain. One major issue concerning global manufacturing is the cost of manufacturing. Looking at Exhibit 1 from a study by the Boston Consulting Group titled, “The Shifting Economics of Global Manufacturing”, we can see the top 25 export economies as well as their cost of manufacturing. Considering all of the 25 countries mentioned in this study, the highest cost in each of these economies is labor. Labor is a huge expense for many companies around the world, which drives the global trend of outsourcing labor to countries where it is cheaper in an attempt to lower this cost. The cost of manufacturing in each of these countries is constantly changing since there are so many factors involved. Labor for example is constantly changing and generally becoming more expensive as a country’s economy begins to grow, since workers are becoming more skilled and demanding more rights and higher wages. There are many changes going on in manufacturing and supply chain processes. Particularly, there are 4 forces that are setting countries apart from each other and allowing them to be more competitive. Those are wages, exchange rates, labor productivity, and energy. In my opinion these forces are areas that countries need to focus on improving and maintaining in order to be able to compete effectively with the global manufacturing industry. In terms of wages there is always a constant increase in the hourly pay of workers. Although some countries may be growing at about 10-20 percent and other at 2-3 percent per year, they are all growing nonetheless. Median hourly wages among the 25 countries looked at by The Boston Consulting Group (BCG) was $17.64 per hour.

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