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American Shipper

UPS study: High-tech exporters looking to right-shore supply chains

Survey of global supply chain executives found companies still see advantages of offshoring production, but are looking at near-shoring or middle ground alternatives in robust export markets.

   High-tech companies are increasingly exploring “right-shoring” avenues for production, according to new research from UPS and IDC Manufacturing Insights.
   The report, UPS’s fifth annual Change in the Supply Chain survey, also found that these high-tech manufacturers expect robust growth in their industry and are exploring 3D printing for new product designs and prototypes.
   IDC polled 516 senior high-tech supply chain professionals in North America, Europe, Asia Pacific and Latin America for the report.
   “High-tech companies are building more flexibility into their shoring strategies and supply chains so they can respond better to demanding market dynamics,” said Dave Roegge, high-tech marketing director at UPS. “They’re thinking more holistically about their strategies to evaluate their transportation costs and the time it takes companies to deliver goods. Customer requirements change rapidly, especially considering the steady stream of high-tech innovations and the fact that there is little to no downtime between product generations.”
   Many of these companies see right-shoring as the solution, based on metrics that could include cost, quality and the time it takes to recover from any operational failures. Forty five percent of survey respondents said they use right-shoring strategies.
   Off-shoring, however, remains the most common strategy. Forty seven percent of survey respondents said they offshore, while 35 percent said they are near-shoring, which moves manufacturing or assembly closer to the location of demand, an increase of 25 percent since 2010.
   “It’s about having a nimble supply chain,” Roegge said.
   The growth outlook for high-tech exports is strong, the survey found, with 46 percent of respondents saying they expect industry export growth globally to increase at the current pace over the next two years, while 28 percent expect faster growth. North American and Latin American respondents were the most optimistic about the future of high-tech exports.
   The survey found that 70 percent of survey respondents report having hands-on experience with it 3D printing, including 32 percent that are just beginning to understand it. For now, high-tech companies use 3D printing mainly to spur innovation as they design new products. The top benefits include faster product development and manufacturing processes.
   Other topics covered in the survey include high-tech companies’ approaches to risk management and their views on sustainability.

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