Toray, Japan's largest manufacturer of synthetic fibers, will substantially increase imports from Southeast Asian suppliers as a substitute for Japanese-made materials. It is no coincidence that currency chaos and plant-relocation and sourcing stories are vying for space on page one. The relentless rise of the deutsche mark and the yen is one big reason companies in Japan and Germany are rethinking how and where they get supplied. The decline in the dollar is why Trek Bicycle Corp. of Waterloo, Wis., is planning to manufacture in the U.S. rather than import everything. Decisions about where to source or manufacture are also greatly complicated by the ongoing, sweeping liberalization of markets around the world and by the ever intensifying competition among developing countries for foreign direct investment.
Multinational managers have many more places to source from or manufacture in.
But it takes considerable analysis and experience to make the right decisions when widely fluctuating financial markets and seismic geopolitical shifts are revolutionizing the way companies build, source and sell around the world. Manufacturers are looking worldwide for markets, for manufacturing rationalization and for low-cost sourcing. Even a successful, large multinational like appliance maker Whirlpool Corp. can have difficulty setting the right strategy for supplying its needs. Whirlpool manufactured in Europe didn't have so much as a single screw in common with models made in the U.S. Today, the Benton, Mich., company is engineering commonality into all its appliances. With standardized production platforms the company hopes to meld its four regional supply networks into a global one.