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by Jeff Moad, MA Editorial Staff Posted on Thursday, February 08, 2007 5:41:10 PM   | Abstract: | Many are finding it hard to manage global design, sourcing, production and logistics. With complexity escalating, that's not surprising. But what's your next move? |
Not long ago, manufacturers such as telecommunications equipment maker Huntsville, AL-based ADTRAN Inc. launched the globalization gambit mainly to take advantage of lower labor and parts costs. Today, while sourcing and producing offshore still delivers those cost breaks, they are not the only reason ADTRAN continues to go global. Increasingly, says Tom Dadmun, vice president for supply chain operations, ADTRAN is growing operations offshore because that's where the customers are. "When you look at the growth areas and emerging markets, they are not in the U.S.," says Dadmun. "The growth in my business domestically will be in the single digits whereby the countries in Asia, South America, South Africa and India are growing much faster; therefore, you must set up global supply chains to reach these customers." ADTRAN is far from the only manufacturer noticing that, as the economies in developing countries such as China and India continue to grow and mature, they are quickly evolving from producers of low-cost goods to big-time consumers. In China, for example, even as overall gross domestic product growth has been slowing, retail consumption has been booming. Monthly retail sales growth for the six-month period ending in February averaged 14% over the same period in 2005, according to a recent report by the Manufacturers Alliance/MAPI (Arlington, VA). In February, year-over-year retail sales growth in China spiked to 15.8%, the report says. [Click to continue] |