About one in six private-sector U.S. jobs is in manufacturing. That's 9 percent of the country's workforce, according to the National Association of Manufacturers. In fact, recent United Nations statistics reveal that the United States tops the world's manufacturing output at $1.83 trillion, with China a close second at $1.79 trillion.
Take advantage of industry changes by leveraging these four major logistics trends.
And although U.S. manufacturing is on the rebound, achieving success will require new tools and strategies. To help shipping and logistics managers take advantage of industry changes, UPS has identified four major logistics trends.
Trend 1: Sourcing closer to customers
With labor and other costs rising in China, countries such as the United States are looking more attractive for sourcing. As Carlos Irastorza, marketing manager at UPS, explains, "Rising labor costs, the volatility in fuel prices and other supply chain risks are driving manufacturing back to the United States."
According to The Boston Consulting Group (BCG), economics are leading manufacturers to reshore (bring manufacturing jobs back to the United States) in industries such as computers and electronics, appliances and electrical equipment, machinery, furniture, fabricated metals, plastics and rubber, and transportation goods.
Benefits of reshoring include:
- Lower transportation costs.
- Reduced supply chain risks.
- Increased production quality.
- Ability to get goods to customers more quickly using a variety of UPS solutions.
Trend 2: Automating to reduce costs
U.S. manufacturers are adopting more complex automation in their manufacturing processes to increase productivity. Irastorza advises customers to apply this practice to their supply chains, as an example.
“Mobile devices are providing a rich medium to reach customers and are impacting both operations and marketing,” he says. For example, mobile devices can improve customer service, since field technicians can take the devices to a job site and record and access critical data, such as parts inventory. Manufacturers are also using technology to improve their inbound operations. Best-in-class companies leverage features within shipping and visibility tools to gain more control of inbound shipments, inventory management and production planning opportunities.
To help manufacturers automate their shipping process, UPS provides a robust portfolio of technology solutions.
Trend 3: Getting e-commerce savvy to boost sales
Successful manufacturers are implementing a multichannel sales and distribution strategy that includes online capabilities. Irastorza recommends that companies develop a long-term e-commerce strategy and consider where distributors fit in, as they are typically responsible for servicing the end-customer.
"The economy has put a strain on distributors in particular because demand has not been there," he points out. "Distributors are increasingly looking to the Internet to expand their reach and improve the customer experience."
Furthermore, manufacturers are using the online experience to educate customers, while distributors use it to better service customers. In either case, UPS provides technology through the UPS Developer Kit and UPS Ready® Program to enhance an end-customer's e-commerce experience.
Trend 4: Growth through exporting
Ninety-five percent of consumers live outside the United States. Couple that with the trend toward reshoring, and it's no surprise that BCG predicts U.S. exports could increase by $65 billion annually over the next five years.
The United States specializes in higher value manufacturing sectors such as specialized machinery; medical, precision and optical instruments; and radio and television equipment.
"UPS can help customers really think through their supply chain strategies when it comes to exporting," Irastorza says. This is critical since, as BCG observes, winners are building flexibility into their supply chains now.