The global manufacturing industry has been through a significant period of change over the past couple of years. The most recent economic downturn has led many manufacturers to re-think their business strategies and look for ways to streamline supply chains and of course reduce costs.

This blog will briefly discuss the manufacturing industry today and review some of the B2B challenges facing these companies. So let me first discuss the manufacturing industry today:

Continued Globalisation of Manufacturing Operations – Manufacturing companies are continuing to globalise their operations with new manufacturing hubs appearing in a number of regions around the world. These companies are keen to reduce costs, just like companies in other industry sectors and they are continuing to establish plants and onboard suppliers in emerging markets such as Thailand, Vietnam and of course China. VW and Ford for example have recently confirmed significant multi-billion dollar investments in new manufacturing facilities in Brazil.

Development of Supplier Parks – In some cases, some of the larger manufacturing companies are establishing supplier parks around their plants so as to improve the reliability of parts deliveries from key suppliers. Not only will this help to reduce logistics related costs but it will allow manufacturing hubs to work much more closely with their suppliers.

Increased use of Contract Manufacturers – Manufacturing companies are continuing to outsource non-core business processes, this is to allow them to remain focused on their core competencies, ie manufacturing goods or products. Some of the larger manufacturers are continuing to outsource the manufacturing process itself. This allows these companies to focus on activities such as product development and improving customer service related processes.

Improve Inventory Control and Supply Chain Visibility – There is a continued requirement to improve inventory control and visibility across their operations. Depending on the type of manufacturing operation and the goods being produced, the manufacturers will need to hold varying levels of inventory, perhaps due to changing seasonal related demand from consumers and markets.

Growth in the Aftermarket Parts Sector – One area that has seen significant growth in recent years, especially during the most recent economic downturn, has been the aftermarket service parts sector.  As many companies around the world delay spending money on upgrading or replacing their equipment so there becomes an increased demand for spare parts to keep these machines or pieces of equipment in service. There are some research studies out on the market that show that some companies actually make more profit on the sale of aftermarket parts than they do on the sale of original equipment. The service parts sector has been described as a relatively recession proof business and is likely to continue to grow during 2010.

Convergence of Supply Chains – Over the last few years there has been a convergence of some of the industry sectors, for example many manufactured goods now contain complex electronic control systems and medical equipment device manufacturers are using an increasing number of LCD flat panel displays within their equipment. This means that the suppliers of these electronic parts are supplying potentially several different industries and there must be some synergies that can be realised by combining supply chains and sharing resources to manage the distribution of these parts.

Increased Investment in Lightweight Materials – Many manufactured goods today contain more lightweight materials than they did ten years ago. With increased use of plastic, carbon fibre and aluminium, some of the raw material providers such as the iron and steel foundries are seeing a decline in their global revenues.

Development of Greener and More Sustainable Supply Chains -  Manufacturers, under pressure from their customers and government policies, are being forced to use less packaging in shipped goods, they are being asked to introduce more recyclable materials in products and  to reduce the amount of paper based transactions flowing across their business,  to name but a few.

So how can B2B Solutions & Services Help Manufacturing Companies in 2010?

The manufacturing industry will have to address some interesting B2B related challenges during 2010.  These challenges are listed below and they are explained in more detail via the video presentation shown below. The presentation shown can also be viewed/downloaded from Slideshare.

• Consolidation of B2B Infrastructures – Extensive merger and acquisition activity across the manufacturing industry is leading to a requirement for B2B network consolidation
• Provide Global Connectivity – Increasing requirement to provide connectivity to global manufacturing hubs and trading partners in emerging markets
• Integration to Manufacturing Systems – Continued requirement to integrate to back office manufacturing systems, e.g ERP platforms
• Simplify Trading Partner Enablement – With the introduction of new global manufacturing hubs, companies are looking for ways to onboard their long distance suppliers as quickly and smoothly as possible
• Improve Visibility of Shipments – With goods being manufactured around the world, there will be a continuing need to improve visibility of shipments, for example aftermarket service parts, in order to improve customer satisfaction levels