Acronyms like BRIC (Brazil, Russia, India, China) and MINT (Mexico, Indonesia, Nigeria, Turkey) have now entered into common supply chain parlance when discussing the whereabouts of up and coming global locations to relocate your low cost manufacturing and MRO capabilities.
Primes and tier manufacturers are increasingly being attracted by lucrative overseas opportunities to move alongside their major OEM airframe customers and offer both global and local (GLOCAL) considerations.
Various country states and regions around the world are redoubling their efforts to provide unified incentives to potential companies that offer local and national government funding, aerospace cluster support, job creation, tax breaks and workforce training development programmes, B2B events – and the weather will probably be much better there too! Roll all this into already established aeroparks located near OEM final assembly lines, R&D centres and universities, and what’s not to like?
Healthy collaboration between airframe OEMs and US states are bearing fruit as well. For example, South Carolina has been working closely with Boeing, who has located its 787 final assembly plant there to create a state-sponsored training programme and facility that can keep supplying qualified, interested employees as the site grows.
Naturally, time differences, currency exchange rates and cultural differences among others need to be factored in when establishing any overseas low cost manufacturing base. However, a healthy understanding of manufacturing’s three fundamental costs: supply chain, raw material, labour, and overhead costs, plus getting your quality right of course, and companies can soon gain competitive advantages over their traditional cost bases.
Mike Richardson, editor