Rolling out more resilience
Recent years of significant supply chain disruption have created increased urgency to build more resilience, redundancy and risk mitigation into global manufacturing operations. This is particularly true when critical elements of a supply chain could be exposed to increasing geopolitical tensions, wage inflation or raw material shortages. The need for supply chain transparency will also grow to achieve ESG targets and government regulations.
A vertical horizon of integration: Vertical integration is becoming increasingly popular as manufacturers seek to build resilience and replicate recently successful models such as Tesla’s gigafactories for battery production.1 Industry analysts predict it will also gain traction within the aerospace industry as new mobility and electrification begin to scale and OEMs seek more control over related supply chains.2
More and more reshore: In response to growing geopolitical tensions, nearshoring and reshoring of supply chains is accelerating. In fact, 70% of manufacturers in the US and Europe say they currently have projects to reshore or nearshore a portion of their operations.3
Getting less sly about supply: Increasing supply chain transparency is a difficult challenge in the industrials sector, particularly when an average aerospace company could have 12,000+ Tier 2 suppliers.4 Today, 70% of global business leaders describe their supply chains as "very" or "extremely" complex and are prioritising greater transparency to ensure resilience, ESG alignment and regulatory compliance.5
1. Barron’s 2. McKinsey 3. Industry Week 4. Deloitte 5. KPMG
70% OF US AND EU MANUFACTURERS ARE PLANNING TO RESHORE OR NEARSHORE OPERATIONS
Vertical integration of functions previously handled by specialised suppliers (in many cases on different continents) will require a highly skilled workforce in an era of global talent scarcity
As manufacturers across sectors attempt to reshore more of their operations at the same time, competition for talent in skilled trades will grow
The ageing of workforce in the most developed markets will create a shortage of the most skilled manufacturing talent at the same time more local production is coming online.
