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The global manufacturing sector: current issues Logo cima

  Phil Thornton |   Free |   CIMA |   2010 |   Thought leadership

This report shows how the manufacturing sector in many countries is in a state of transition: growing in emerging economies; shrinking but becoming more productive in advanced economies. The new manufacturing giants with low wage economies tend to compete on cost, the established players prefer to move up the manufacturing value chain to compete on technology and innovation. Lean manufacturing techniques which control costs and improve quality are pervasive. (PDF 303KB)

Topics covered:
  • Management accounting: Technical: Cost accounting & management: Cost accounting, Advanced
  • Management accounting: Technical: Cost accounting & management: Cost management, Advanced
  • Management accounting: Technical: Management reporting & analysis: Performance management, Advanced

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2 Comments/Reflections

Tristan Lewis

Tristan Lewis Oct 2017

Interesting article, enjoyed the read.
The general trend one can establish from most markets, is that the consumer(demand) wants more for less, whether it is physical or whether value adding.
As I mentioned first up, enjoyed the read and also found the last paragraphs quite interesting, where how the management accountant can assist was highlighted in summary.
Jamie Cooke

Jamie Cooke Oct 2015

Enjoyed reading this article and it's highly relevant to my role.

My employer is a manufacturer / repairer of products in a very competitive industry that utilises tenders in order to drive down costs.  So there is constant pressure on prices and therefore costs meaning we have to challenge manufacturing productivity and balance bulk purchases to drive low costs with stock holding.

Furthermore we have a product innovation team and a key part of my role is modelling investment requests to ensure an adequate return will be realised.  These models always include a P&L and cashflow so profitability, payback, NPV and IRR can all be taken into consideration.  This also leads to wider business discussions about resource, and whether we're reacting quickly enough to the market (one recent example has us 6 months behind the market as of right now, with us needing 12 months to develop a competing product - the reason for this delayed response being a lack of resource which has arisen due to cost cutting to stay lean in a challenging business climate).

All of these considerations have to be balanced, whilst learning from the Toyota experience so as to not cut costs to the point that you can no longer keep up with growth and the need to continually innovate.