Location

Location, Location, Location

Suppliers are under intense cost pressure forcing them to look for new low-cost patterns of sourcing and manufacturing. But our latest research into location strategy suggests that if suppliers cannot devise integrated location strategies that embrace risk as well as cost, in the longer term they may lose out.

The key points covered by our research include:

  • A strategic deficit among supplier companies extending their operations across borders - and to the fact that this is likely to be a growing problem
  • Although overall capital flows to emerging economies fell in 2008 amid economic crisis, foreign direct investment actually increased
  • Auto suppliers making these investments are driven primarily by growth and cost considerations
  • In very few cases do these investments appear to form an integrated strategy that would embrace all globalisation drivers, with the aim of developing a balanced global footprint that would be resilient in the face of changing conditions
  • It is likely that the current downturn will cause many manufacturers to look for lower cost locations, and to refocus operations on regions where there is still economic growth
  • Costs and growth are not the only factors that should drive location strategy: companies should also look at their innovation needs, and at the opportunities for balancing risk in global businesses
  • Companies face strong pressures to cut costs and meet customer requirements, immediately

 

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Global Location strategy for Automotive Suppliers  

Global Location strategy for Automotive Suppliers
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