Vendors to play greater role in manufacturing

7 January 2009

07 January 2009 | Paul Snell

Manufacturers will become more dependent on suppliers in the future but use fewer of them, according to a new report by Capgemini.

The study, Manufacturing in 2020, found just under half of 152 global manufacturers interviewed said vendors would be more involved in the research and development and product design processes by 2020. Clients will still control specifications and what is being sourced. Some 51 per cent of respondents also believed their firm would be using fewer suppliers in the future, in an attempt to become leaner.

The research also found global manufacturing would increase, with most vendors wanting to move down the supply chain, away from raw material production and supply and closer to producing finished goods.

Globalisation will also increase the need to produce specific products for specific regions, and this will increase the use of subcontracting to regional vendors. Executives believed traditional low-cost locations, such as China and India, would continue to be competitive. A total of 18 per cent thought no more low-cost locations would arise in future.

There will also be greater reliance on foreign suppliers, with all UK manufacturers expected to source from overseas, and even 80 per cent of Chinese firms buying from abroad.

The report urged manufacturers to start planning for supply chains that are more collaborative and flexible, tying international expansion with the ability to produce goods in those countries.


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