BCG 2015 Mfg Exec Survey_key Findings for MEDIA_final

7/25/2019 BCG 2015 Mfg Exec Survey_key Findings for MEDIA_final

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For Media Use OnlyDo Not Reproduce More Than Two Slides or Charts Without Permission

Made in America, AgainFourth Annual Survey of U.S.-Based Manufacturing Executives

December 2015


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Executive summaryKey takeaways from BCGs fourth annual survey of U.S.-based manufacturing executives

17% of respondents report actively reshoring production today

2.5x the number that were actively reshoring in 2012

More companies are moving from consideration to action

31% of executives would put new capacity to serve the U.S.

market in the U.S. versus 20% who would choose China

Significant reversal from two years ago, when China was

favored by 30% to 26%

Companies that are reshoring most often cite core cost

factorsshortening supply chains, reducing shipping costs

as biggest reasons

Access to a skilled workforce is also a key reason; 2.7x as

many respondents cite increased skilled labor as a driver for

moving production tothe U.S. compared with those who cite it

as a reason for offshoring fromthe U.S.

56% believe that decreasing costs in automation have

improved their product competitiveness

71% believe that advanced manufacturing technologies will

improve the economics of localized production

Executives who anticipate net job gains within the next five

years outweigh those predicting declines by a 2-to-1 margin

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2

3

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5

Interest in reshoring production to theU.S. remains strong, and the percentageof companies actively moving operationsback to the U.S. continues to increase

The U.S. has surpassed China and isoutpacing Mexico as the most likelydestination for new manufacturingcapacity to serve the U.S. market

Key drivers of expanding manufacturingcapacity in the U.S. include costs, accessto a skilled workforce, and increased localcontrol to drive quality and innovation

Investment in automation and otheradvanced manufacturing is seen as anopportunity to further drive efficiency andU.S. competitiveness

Prospects for job creation remain strong


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Survey methodology

Since2012, The Boston Consulting Group (BCG) has conducted an annual online survey of senior-

level, U.S.-based manufacturing executives. This years survey, conducted in September, elicited 263responses. The responses were limited to one per company.

Virtually all of the respondents work for companies that manufacture in the U.S. and overseas andmake products for both U.S. and non-U.S. consumption. Respondents are decision makers incompanies with more than $1 billion in annual revenues, across a wide range of industries, including:

Electronic and other electrical equipment andcomponents, except computer

Transportation equipment

Industry and commercial machinery

Fabricated metal products, except machinery

and transport

Chemicals

Rubber and plastics products

Primary metal industries

Food products

Computer equipment

Petroleum refining and related industries Apparel and other finished products made from

fabrics and similar material

Lumber and wood products, except furniture

Printed products

Stone, clay, glass, and concrete products

Furniture and fixtures

Paper and allied products

Textile mill products

Leather and leather products

Tobacco products

F M di U O l D N t R d M Th T Slid Ch t With t P i i


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Interest in reshoring production to the U.S. from Chinaremains strong, with a move from consideration to action

Sources: BCG Manufacturing Survey, February 2012, August 2013, August 2014, and September 2015Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: Given the fact that Chinaswage costs are expected to grow, do you expect your company will move manufacturing to the United States? Question asked only of companies that currently manufacture in China. N = 132.

7

13173

8

7

8

17 15

18

17 15

0

10

20

30

40

50

60

20152013

54

Yes, we will move production to the U.S. inthe next two years

Yes, we are actively considering doing this,although we have not made a final decision

Yes, we will consider doing this inthe near future

53

Yes, we are already actively doing this

Respondents (%)

37

2012

1

F M di U O l D N t R d M Th T Slid Ch t With t P i i


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The trend of year-over-year increases in companies activelyreshoring has continued

17

13

7

0

5

10

15

20

Respondents (%)

2013

+31%

2012 2015

Yes, we are already actively doing this

+88%

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Sources: BCG Manufacturing Survey, February 2012, August 2013, August 2014, and September 2015Note: Numbers in the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: Given the fact that Chinaswage costs are expected to grow, do you expect your company will move manufacturing to the United States? Question asked only of companies that currently manufacture in China. N = 132.

For Media Use Only Do Not Reproduce More Than Two Slides or Charts Without Permission


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The U.S. has surpassed China and is outpacing Mexico asthe most likely destination for new manufacturing capacity

Sources: BCG Manufacturing Survey, February 2012, August 2013, August 2014, and September 2015Note:Numbers atop the bar charts have been rounded; percentage changes outside the bar charts are based on the actual numbers before rounding. Question asked: In the next five years,how will the supply chain change for the products you intend to sell inside the U.S.? Allother destination countries accounted for 18% of responses in 2013, 26% of responses in 2014, and20% of responses in 2015.

2

30

26

20

31

0

10

20

30

40

10

+5

ChinaUnited States

20152013

2626

2931

0

10

20

30

40

+3+5

MexicoUnited States

Most l ikely dest inat ion for n ew manu facturing capacity to serve the U.S. market

Respondents (%)



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Companies that have reshored cite increased regional-ization, strong workforce and environment, and local control

76

70

64

57

66

63

55

52

14

18

22

23

16

19

25

30

10

13

15

20

18

18

20

18

0 20 40 60 80 100

Shorten our supply chain

Accelerate innovation andproduct development

Becloser to customers

Reduce shipping costs

Respondents (%)

Improve quality and yield

Provide local control overmanufacturing processes

Make it easier to do business

Access theskilled workforceand talent

Primary reasons formoving to U.S.

Source: BCG Manufacturing Survey, September 2015Note: Question asked: Why did your company move production to the U.S. from another country? Please select how much you agree or d isagree with each of the following reasons for change.

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Strongly or somewhat disagreeStrongly or somewhat agree Neutral

Strong workforce andbusiness environment

Control over process,quality, and innovation

Benefits of increasedregionalization



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Manufacturers are 2.7x more likely to move production tothe U.S. than from the U.S. to access skilled labor

3

Source: BCG Manufacturing Survey, September 2015Note: Chart counts respondents who marked Strongly or somewhat agree. Numbers atop the bar charts have been rounded; percentage changes outside the bar charts are based on theactual numbers before rounding.1Question asked: Why did your company move production to another country from the U.S.? Please select how much you agree or d isagree with each of the following reasons for change.2Question asked: Why did your company move production to the U.S. from another country? Please select how much you agree or d isagree with each of the following reasons for change.

57

21

0

20

40

60

80

Production moved from the U.S.1

2.7x

Production moved to the U.S.2

Respondents (%) citing access to the skilled workforce and talent as a strong factor for moving production

Responses are consistent with the 2014 survey, in which 74% of respondents reportedmoving production to the U.S. to access skilled labor



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Executives plan to invest in automation or other advancedmanufacturing to enhance product competitiveness

56

71

75

31

23

16

13

6

10

0 20 40 60 80 100

Respondents (%)

Strongly or somewhat disagreeNeutralStrongly or somewhat agree

Decreasing automationcost improved my productcompetitiveness againstproducts sourced fromlow-cost countries

Manufacturing executivesbelieve automation andadvanced manufacturing willpromote the following:

Reduce costs and increase

their competitiveness

Allow them to benefit from

being closer to suppliers and

customers

Increase demand for highly

skilled workers

Source: BCG Manufacturing Survey, September 2015Note: Task stated: Please select how much you agree or disagree with each of the following reasons for change.N = 252.

4

Advanced manufacturingwill improve theeconomics of localizedproduction

The U.S. is stronglypositioned to benefit frommanufacturers that seek toincrease regionalization,especially as automation

costs decline

We will invest inadditional automation or

advanced manufacturingtechnologies in the nextfive years



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Twice as many executives expect trends to drive net growthin U.S. manufacturing jobs within five years

Source: BCG Manufacturing Survey, September 2015Note: Question asked: Based on current trends, what do you expect to happen to the number of manufacturing jobs in your company over the next five years?1Includes responses of less than +/-1% per year.

5

8%

19%

23%

26%

6%

3%

16%

30

20

10

0

Respondents (%)

Increase

by >20%

Increase by

10%-20%

Increase

by 5%-9%

FlatDecrease

by 5%-9%

Decrease

by 10%-20%

Decrease

by >20%

Job loss

50% of respondents

anticipate net job creation25% of respondents

anticipate net job losses

1

Job creat ion

Anticipated job creationoutweighs loss by a 2-to-1

margin

Anticipated job creation is still strong but slightly lower than last years 3:1 ratio of net

job creation to net job loss, due in part to global macro uncertainty (e.g., fx, growth)



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This research is part of BCGs ongoing series on the

shifting dynamics of global manufacturing

Authors of this researchHarold L. SirkinSenior Partner and coauthor ofThe U.S.

Manufacturing Renaissance: How Shifting Global

Economics Are Creating an American Comeback

(Knowledge@Wharton, November 2012)

BCG Chicago

Michael ZinserSenior Partner, coleader of the global Manufacturing

practice, and coauthor ofThe U.S. Manufacturing

Renaissance: How Shifting Global Economics Are

Creating an American Comeback

BCG Chicago

Justin RosePartner, leader of Industrial Goods Operations team in

the Americas, and coauthor ofThe U.S.

Manufacturing Renaissance: How Shifting GlobalEconomics Are Creating an American Comeback

BCG Chicago

Selected publications and

research in the seriesDespite a Strong Dollar, the U.S. Retains a Big ManufacturingCost Advantage over Europe, Japan, and Other DevelopedCountries(press release)

An analysis by The Boston Consulting Group, July 2015

How a Takeoff in Advanced Robotics Will Power the NextProductivity Surge(press release)

An analysisby The Boston Consulting Group, February 2015

The Shifting Economics of Global Manufacturing: How CostCompetitiveness Is Changing WorldwideA report by The Boston Consulting Group, August 2014

The U.S. Skills Gap: Could It Threaten a ManufacturingRenaissance?

A report by The Boston Consulting Group, August 2013

Behind the American Export Surge: The U.S. as One of theDeveloped Worlds Lowest-Cost Manufacturers


U.S. Manufacturing Nears the Tipping Point: WhichIndustries, Why, and How Much?

A report by The Boston Consulting Group, March 2012

Made in America, Again: Why Manufacturing Will Return tothe U.S.


Note: Most publications are available on BCGs thought leadership portal, www.bcgperspectives.com, or at www.bcg.com.

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BCG 2015 Mfg Exec Survey_key Findings for MEDIA_final