The Future of Manufacturing: Why It’s Shifting and Where It Will Go Next

The Future of Manufacturing: Why It’s Shifting and Where It Will Go Next

By Chris Crutchley on April 27, 2022
Today’s Global Manufacturing is More Than Just China — So Where Will it Go Next?

Recently, something peculiar happened in the world of international manufacturing. Vinfast, the Vietnamese electric automaker, decided to open a factory in the USA

But wait — wasn’t it just a few decades ago that retailers were forced to outsource manufacturing to East Asia just to remain competitive? How can it possibly make more sense for a Vietnamese company to manufacture in the United States?

The answer is that the supply chain game has changed. Outsourcing for cheap labor is no longer the only factor at play in manufacturing. New considerations are playing out before our eyes, including:

  • Ability to proactively manage one’s supply chain
  • Proximity to end customer
  • Production facilities spread out across multiple regions to manage risk (or just supply chain resiliency)

The primary countries in manufacturing are still China and the US, and this ranking is not going to change overnight. But the global dynamic of who manufactures where — and why — is beginning to shift.

Read About CBIP's Full-Service Adaptable Logistics Services

Let’s take a look at which new locations are poised to become new hubs in global manufacturing and why now is the time to diversify. 

Manufacturing in Asia means much more than just China

China is still the top manufacturing nation and will likely maintain this position in the years to come, but many companies are now looking to insulate their supply chains. That means ensuring 100% of their production isn’t confined to a single nation.

Things have changed greatly in China over recent years. Subsequently, supply chains linked to China have been disrupted while costs and worker wages have both increased

. This all comes on top of the recent roadblocks presented by COVID-19; in the spring of 2022 alone, lockdown measures in Shanghai left 90% of truck capacity out of service. It’s now clear that manufacturing in China is no longer as reliable or as cheap as it once was. 

Many retailers are making moves to keep some production or distribution in China while setting up another outfit in a different region. And many countries in Southeast Asia — such as Vietnam, Thailand, and Malaysia — are implementing policies to attract those companies.

Southeast Asian countries have long been known for low-cost labor and cheap manufacturing. However, the region is now well-positioned to take advantage of a new trade pact, the Regional Comprehensive Economic Partnership (RCEP), as well as the following key trends:

  • Increased FDI from trade partners like China, Japan, and South Korea
  • Rising living standards in the region, creating an attractive new market for retailers
  • Retail desire to bring smaller production units closer to end-users
  • Mitigating risk by setting up production in South East Asian countries in addition to China

New markets, global trends, and favorable trade agreements can create the perfect environment for change. But there are still a few substantial barriers.

Recent research shows that the region will need to invest in new technologies to bring manufacturing into the future, and governments will need to implement policies favorable to trade. This is a pretty significant roadblock, as the region is behind when it comes to tech adoption in manufacturing processes. 

And yet, the global supply chain is undergoing a paradigm shift. Investors are likely to soon be ready and willing to put new tech into practice to ensure future success. Countries in Southeast Asia have a tremendous opportunity now to develop strong multinational value chains — thus increasing investment and playing off of each other's strengths. 

RELATED READING: The 3 Most Important Steps for Scaling Your E-Commerce Business

Changes to the status quo in North America

Let’s not forget that the USA is still the number two manufacturing country in the world. And, like China, recent events have revealed weaknesses in supply chains regionally.

Companies that manufacture in the USA are similarly looking to find new bases for their manufacturing operations. After all, east Asia is a long way away if something goes awry, and trade terms between the USA and many Asian countries are still in flux.

For this reason, some US retailers are considering nearshoring all or parts of their manufacturing. Nearshoring, ie bringing operations like manufacturing closer to a retailer's home base, is a tempting offer for companies struggling to recover from COVID-19-related supply chain breakdowns.

Plus, the US already has favorable agreements and high trade volumes with many Latin American countries. Apart from the USA’s interest in the region as a “far-but-not-too-far-away” manufacturing hub, there is also a keen interest in taking advantage of the region’s key raw materials, such as lithium and copper.

Political instability presents another challenge in Latin America. Working around developing infrastructure and unpredictable governments is difficult for businesses abroad. But just like the ASEAN region, South and Central America stand to benefit greatly from foreign investment in manufacturing in the region.

Why the climate is perfect to diversify production bases

New technologies, new markets, and new supply chain strategies are creating a new set of possibilities for how you can run your supply chain.

Through the use of AI, robotics, and big data tools, factories are becoming more cost-efficient and releasing fewer emissions. In fact, energy efficiency and cost savings can go hand-in-hand; studies show that implementing a resilient strategy for sustainability can cut costs for manufacturers by nearly 60%. With greener factories, it will become more economical to have multiple production centers that are situated much closer to the end-user.

All of these tie in perfectly with the e-commerce desire to break into new markets, namely those populations in Asia that are experiencing wage growth and increased standards of living. Projections for economic growth in Latin America and Southeast Asia coupled with the desire to expand production in those regions mean there’s a big opportunity in the upcoming years.

Outsourcing production to the cheapest region possible is no longer the only strategy. Retailers are moving more toward building a supply chain strategy that can withstand crises — all while bringing new value wherever possible.

Stay in step with changes in manufacturing

If your business is considering how to create a manufacturing strategy that’s resilient and adaptable, you need a partner that knows the industry inside and out.

At CBIP, we’re constantly following the latest trends in manufacturing. Using our broad network of global partners, we work with you to assess sourcing, manufacturing, and the shipping reliability that today’s consumers demand. We fit your needs based on your customer, business size, goals, and more to give you what matters: options.

Talk to one of our experts today to learn how CBIP can assure your supply chain sees long-term success.

About Author

Chris Crutchley

Chris Crutchley is CBIP’s director of operations and finance. He has over a decade of corporate finance and operational expertise throughout the Asia Pacific.

In logistics, Chris strives to continuously innovate and challenge the industry’s norms in order to offer clients world-class service that emphasizes clear communication.


Powered by the latest in logistics technology

Asia’s first carbon-neutral 4PL firm

We are an extension to your in-house logistics team

Our Service

E-Commerce Logistics

Full-Service Logistics


Subscribe Now

Get the latest insights from the CBIP team on global logistics & supply chain.

Grow your business with a partner that puts your needs first. Schedule a Call Today

Please enter a valid business email.


Every e-commerce brand or seller is a little different. So, the best way for us to provide you with a detailed quote is to fill out our online questionnaire here and from here we can walk you through the various options available to you with CBIP Logistics.

No, we do not charge the higher fee associated with long-term storage. No matter how long the goods remain in our warehouse. They are charged the same rate for inventory storage.

Yes! We can store your inventory and replenish Amazon as necessary, helping you adhere to Amazon’s strict rules and regulations for packaging, labeling and shipping.

We charge for storage by either cubic meter, sqft or per pallet / racking space per week. It depends on the request from the customer as one-size doesn’t fit all. It would be better if you schedule a call with us

We provide a variety of services in the logistics landscape which includes Ocean Freight, Airfreight, Domestic Delivery, Warehouse & Distribution and Customs Clearance & Brokerage.

We offer several types of warehouses that are tailored to your requirements and vary among countries, e.g. Bonded Warehouse, General Warehouse, Consolidated Warehouse and Distribution Center.

Yes, you can track it from our platform by using the “Log In” function and access to “B2B” which is dedicated to track any shipment you have with us. This is a real-time platform which integrates with some major carriers so from here you can get the visibility of vessels on the globe map.

  • Origin Management: digital PO management and connected suppliers supported by agnostic 3PL vendor management capabilities.

  • Shipment Tracker: real time tracking also vessel tracking to let you know where the goods are.

  • Destination Management: platform manage the delivery to Distribution Centre and update frequently on platform.

  • Paperless Handling: we centralize the document hub on the platform for shipment-by-shipment. From here you can get the full documentation of a particular shipment within a click.

We offer the consulting services to enterprises who looking for either:

  • Optimizing their existing operations for cost, operation & performance effectiveness.

  • Scale their B2C or B2B business

Yes, our consulting services range from completing assessments on existing business, strategy & planning, tendering & RFP development, vendor selection and transitions & special projects.

Every business, we have a dedicated Account Manager who is the focal contact point that you can get in touch for daily operation.

Greenhouse gases (GHGs) are any gases that contribute to climate change through the effect of global warming (carbon dioxide, methane, nitrous oxide, and more). As more of these gases are released, the atmosphere traps more heat from the sun every year. This is causing the climate to change. GHGs and carbon dioxide (CO2) emissions are often used interchangeably with carbon emissions when talking about the climate.

Like most websites CBIP uses cookies in order to optimize your experience and deliver a more responsive user experience. These cookies are safe and secure, and we only use this data within the CBIP Organization. Privacy Policy