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Companies that continue to base their manufacturing strategies solely on China's rock-bottom wages and stratospheric domestic growth rates are in for a rude awakening. New challenges will require new competitive priorities.

China's emergence as a manufacturing powerhouse has been astonishing. In seventh place, trailing Italy, as recently as 1980, China not only overtook the United States in 2011 to become the world's largest producer of manufactured goods but also used its huge manufacturing engine to boost living standards by doubling the country's GDP per capita over the last decade. That achievement took the industrializing United Kingdom 150 years.

Today, however, China faces new challenges as economic growth slows, wages and other factor costs rise, value chains become more complex, and consumers grow more sophisticated and demanding. Moreover, these pressures are rising against the backdrop of a more fundamental macroeconomic reality: the almost inevitable decline in the relative role of manufacturing in China as it gets richer. Manufacturing growth is slowing more quickly than aggregate economic growth, for example, and evidence suggests that the country is already losing some new factory investments to lower-cost locations, such as Vietnam, sparking concern about China's manufacturing competitiveness.

Competitiveness, of course, is a broad term that can confuse more than clarify. During the 1980s, for example, there was much hand-wringing in the United States about declining manufacturing competitiveness versus Japan. In the following decade, however, those concerns faded, replaced by a focus on the failings of "Japan Inc.," the SUV-fueled resurgence of the US automotive sector, and the boom in US high-tech manufacturing. In the United States then, as in China today, there isn't just one manufacturing sector; there are many, each with different competitive strengths and weaknesses.

In this article, we move beyond the hyped hopes and frantic fears for Chinese manufacturing as a whole, to gain a more balanced picture of this diverse sector. We start with a summary of four key challenges that affect different types of manufacturers in different ways and then move on to a discussion of competitive priorities whose importance again varies for players of different stripes. Despite the variation across manufacturing subsectors, companies-Chinese owned and multinational alike-can't escape the need to raise their game and move up the value chain by boosting productivity, refining product-development approaches, and taming supply-chain complexity. Those that do should prosper in the years ahead, while those that rely on yesterday's model of rock-bottom wages and stratospheric domestic growth rates are likely to fade.

Four challenges

For years, China's low salaries; strong supply base; high investment in port, road, and rail infrastructure; and solid engineering and technical skills provided a strong platform for manufacturing exports. Meanwhile, a vast domestic market helped fuel China's continuing transition to a consumption-based economy. Today's outlook is more mixed. Here, we review four core challenges and the types of players particularly affected by each of them. In doing so, we draw on a set of global manufacturing archetypes established recently by the McKinsey Global Institute (see sidebar "The makeup of Chinese manufacturing").

The makeup of Chinese manufacturing

Rising factor costs

Rising wages and the appreciation of the renminbi have dampened China's exports in recent years and focused global attention on its future viability as a low-cost manufacturing center. Most multinationals that produce labor-intensive goods, like textiles and apparel, are actively seeking to diversify beyond China to reduce costs and mitigate political and supply-chain risks. China-based processors of goods such as beverages, fabricated metals, food, and tobacco are also concerned about rising costs, including those for packaging. Yet their regional focus makes this less a global competitive issue and more a question of which players in the value chain will create the most value.

Rising consumer sophistication

McKinsey research suggests that by 2020, the income of more than half of China's urban households, calculated on a purchasing- power-parity basis, will catapult them into the upper middle class- a category that barely existed in China in 2000 (for more, see " Mapping China's middle class "). The members of this group already demand innovative products that require engineering and manufacturing capabilities many local producers do not yet adequately possess. An executive of a Chinese television-panel maker, for example, recently confessed that his company cannot fully meet the requirements of high-end customers and that the quality of his company's flat-screen panels is exceeded by that of products from fast-moving South Korean competitors. China's automakers face a similar challenge: consumers perceive their brands as lower in quality, even compared with foreign brands assembled in nearby Chinese factories.

These issues confront players in a range of other sectors-from appliances and chemicals to electrical and office machinery, pharmaceuticals, telecommunications gear, and transportation equipment. What they have in common is that they compete on the strength of their R&D, technology, and ability to bring customers a steady stream of new products and services. Rising consumer expectations will require even food and beverage players to raise their game on freshness and regulatory compliance, areas where China's standards still lag behind Western ones.

Rising value-chain complexity

Another big challenge is coping with the rising value-chain complexity that accompanies consumer growth. Greater affluence and rapid urbanization require product makers to manage, make, and deliver an array of increasingly diverse and customized products to increasingly remote locations. Between now and 2015, for example, almost two-thirds of the growth in demand for fast-moving consumer goods will come from smaller (Tier-three and Tier-four) cities, which outnumber their Tier-one counterparts, such as Beijing or Shanghai, by a factor of 20.

Product proliferation and booming e-commerce also contribute to value-chain complexity. Business-to-consumer online sales in China are expected to grow by 45 percent a year from 2010 to 2015. For product makers, this means smaller and smaller lot sizes and deliveries to households farther and farther "out there." During Chinese festival periods, the supply chains of many companies already creak under the strain of online orders. Demanding consumers contribute to supply-chain headaches, as well. Since many retailers in China accept cash-on-delivery payments, it's not uncommon for shoppers to pit online retailers against one another by ordering, say, three identical products from three retailers-and refusing delivery to all but the first to arrive.

Such issues are relevant for technology companies and others responding to the Chinese consumer's increasingly sophisticated tastes. But rising value-chain complexity is also a worry for manufacturers of more labor-intensive goods, given the sheer variety of products they make, and for regional processors, whose logistics networks are affected by urbanization and booming infrastructure development.

Heightened volatility

The uncertain global economic environment since 2008 has complicated life for manufacturers everywhere. Those in China have arguably been the most severely affected, given the country's status as the workshop of the world.

In China's steel industry, for example, annual demand growth slowed to 3 percent in 2012, after a decade of double-digit increases. The result has been lower capacity utilization, cutthroat competition, and a 56 percent decline in average profit margins for the industry from 2010 to 2012. Similarly, in China's massive auto industry, annual growth rates over the past five years have varied from 7 percent to 52 percent. Appliance and electrical-machinery producers have also experienced strong demand fluctuations, exacerbated by gyrating overseas demand.

Volatility at such levels makes planning difficult for China's manufacturers. This is problematic for companies that routinely make large, long-lived capital expenditures whose returns are crucial determinants of performance.

Three imperatives for China's manufacturers

As labor costs rise and slowing growth dampens the ability of China's steadily rising industrial output to deliver regular productivity gains, manufacturers there will need to strive for global levels of operational excellence. Energy efficiency is a particular opportunity for many companies (see " Seizing China's energy-efficiency opportunity: A case study "), but far from the only one. Companies hoping to differentiate themselves beyond low-cost labor also can focus their efforts upstream (to harness innovation and product-development efforts) or downstream (to tame supply-chain complexity) or both, depending on the characteristics of competition in their sectors.

1. Achieve manufacturing excellence

Lean and Six Sigma are not new to China. Plant managers in domestic and multinational companies alike have worked hard to bring manufacturing-excellence tools and approaches to the country's shop floors. But for all these efforts, significant potential remains, mainly because plant managers in China often focus on "hard" technical tools at the expense of "softer" ones involving mind-sets and behavior. A recent lean-manufacturing transformation at one state-owned enterprise, for example, fell far short of its efficiency targets when managers and supervisors failed to complement the otherwise excellent technical changes with the necessary softer skills-including leadership-that would have made the changes stick.

One factor that complicates these problems has been the breakneck development of China's manufacturing sector, which means that many workers are relatively new to the job. We have seen too many frontline managers, lacking the experience to identify the problems inevitably associated with new plants and new ventures, merely react to problems rather than look for their root causes. Companies facing this problem will never get the full benefit of the productivity improvements they expect from lean. In one auto-assembly and body-shop operation, for example, team leaders spent as little as 5 percent of their time on coaching and problem solving (best practice is about 30 percent). Improvement efforts stalled until the company introduced standardized daily work agendas for team leaders and supervisors, to emphasize that shift meetings were occasions for problem solving and coaching-not firefighting.

Cultural differences also continue to thwart operational improvements in Chinese companies. In one auto plant, the multinational joint-venture partner installed visual-performance boards to make the status of work projects transparent, assuming that the tools would be accepted as they are elsewhere in the global auto industry. In fact, the frontline workers resisted them, interpreting the initiative as a criticism of individual colleagues and forcing the joint venture's leaders to devise ways to achieve the same effect without alienating the staff. Moreover, the Chinese company's senior plant managers, while supporting the changes, were initially uncomfortable about role-modeling the more transparent and inclusive way of working. A new continuous-improvement department eventually helped workers and managers alike to view greater transparency and continuous improvement as a new way of working rather than a "flavor of the month" exercise. The automaker's experience is not uncommon; indeed, the fact that the domestic leaders became involved was encouraging-all too often, the front line must sort out such changes itself.

Finally, companies in China must aspire to extend efficiency improvements throughout the value chain. An automotive joint venture recently began this journey by working with 60 of its suppliers to address the 30 most pressing quality problems. The company fixed them in only six months and has since prevented their recurrence, in large part by equipping its people with assessment tools and skills and by engaging suppliers to address problems at the source. A new performance-management system helps ensure that both the automaker and its suppliers keep up their ends of the bargain.(For more on the relationship between purchasers and suppliers, see sidebar "Seeking purchasing excellence in China.")

Seeking purchasing excellence in China

2. Look upstream

For industries reliant on innovation, the triple whammy of rising costs, complexity, and competitive pressure means that the old ways of developing products in China now risk becoming liabilities. Staying competitive will require domestic companies and multinationals alike to change, starting with the mind-sets and attitudes that have pervaded product-development activities in China.

Product-development roadblocks. Domestic Chinese companies must get beyond the "faster, cheaper" fixation that has characterized their approach to R&D in recent decades. For every world-beating Chinese innovator, we still see dozens of smaller players struggling to develop the R&D pipelines that would help them grow from scrappy upstarts into incumbents that can realize their global ambitions. The growth of one China-based medical-device player, for example, has halved in recent years as smaller domestic competitors copy its designs and undercut its prices, much as the company itself copied from multinationals in earlier years. Yet even as it works now to boost its R&D capabilities and to generate market insights-extremely difficult tasks given the absence of necessary skills and institutional processes-the copying mind-set remains strong.

To some extent, multinationals face a mind-set challenge as well. Many invest significantly in their China R&D units while continuing to regard them as cost-saving satellites of the home-office "mother ship." Even when multinationals establish supposedly autonomous R&D units in China, many lack the support and skills to become intellectual-property creators, not just consumers. The experience of another medical-product company we studied-this one a multinational-highlights the challenge.

The leaders of the multinational's China R&D group thought they'd identified a lucrative niche for a new, low-cost medical-diagnostic product-but were denied funding by the head office back home. The general manager of the China business fought what he thought was a shortsighted decision, winning permission to proceed if his business unit could finance the new product itself. His unit ultimately did just that, in part by promoting the product to customers and collecting advance orders. Once launched, it was highly successful-at first in China but soon in other countries too as the company's sales reps got wind of its popularity and began offering it in their own regions.

Fast-forward about 18 months, when the company decided to revise the product. Rather than entrust its development to the China R&D team, the company assigned it to the main R&D group at headquarters and used the China team for support. The product flopped when new and technically elegant features and other changes insisted on by the Western group proved too expensive for customers or irrelevant to them.

A success story. The experience of a global lighting manufacturer suggests how some companies are overcoming the challenges. With global consumer preferences shifting toward new applications of a decades-old technology, the company identified a huge market opportunity in LED lighting. The market was also hugely competitive-Chinese and Taiwanese players were piling into the lower-end consumer segments-so a well-designed product clearly wouldn't be enough. Hitting a low price point and rapidly establishing scale would also be necessary.

The multinational briefly considered using its world-class global R&D unit to develop the product. But senior executives worried that the group's insular, engineering-centric culture would lead it to "overspec" the offering with costly features. Leaving it to the company's China unit, on the other hand, was too risky: that group couldn't generate unique customer insights and didn't have enough experience working with supplier networks upstream or with the company's global supply chain downstream to compete on cost and speed. The obvious compromise-combining the groups in a more traditional way by playing to the strengths of each-might mean suffering the usual time-zone delays while reinforcing the "silo" cultures the company's leaders wanted to break. It ultimately chose to view the project as an experiment for improving both units, so that the one in China would become more independent and the effort's benefits could be leveraged globally.

To get there, company executives quickly assembled a mixed R&D team in China comprising representatives from the marketing, procurement, supply-chain, and quality groups. For ten weeks, the team worked closely to develop an idea-generation and decision-making process that could not only create a winning, scalable design but also build skills and develop processes the company could use globally. The team collaborated to create and test customer insights, complementing the work with teardowns of competitors' products. It also conducted shop-floor walkthroughs with suppliers and met with a variety of manufacturing experts to learn how the product could incorporate cheaper, more modular designs.

A set of simple rules proved critical to breaking old habits and unlocking good ideas: to ensure that the team never fixated on one part of the value chain at the expense of another, it consistently asked a handful of total-cost-of-ownership questions when it made its most important decisions. This approach helped spark improvement ideas in unusual areas, such as product packaging: the team found a way to give one of its products a more prominent shelf appearance-a locally important factor because of high levels of competition-while lowering logistics and other costs through the efficient use of materials.

As the effort picked up steam, it became popular with other managers in the China business. The company trained some of these "evangelists" as change agents to maintain momentum at the end of the pilot. This effort ultimately helped the company to lower the costs associated with the product line by an additional 20 percent beyond initial expectations. Further, the effort positions the company well for future cost-reduction opportunities that should arise as the industry matures.

3. Tame supply-chain complexity

While the effects of value-chain complexity vary by manufacturing subsector, most Chinese consumers are changing faster than supply chains are adapting. Indeed, supply chains in the country-both multinational and domestic-are generally set up for a low-labor-cost environment that is quickly disappearing.

Now that long cycles characterized by so-so levels of transparency and cross-functional collaboration are proving insufficient, companies will have to start by revisiting their demand planning. Consider the experience of a large consumer-electronics company whose processes were proving unsuited to the new demand patterns associated with some of its high-end products. Poor or delayed forecasts were disrupting operations and leading to excess inventories, while also upsetting customers downstream.

The turning point was the company's recognition that its planners were applying the same broad-brush approach to all products, regardless of their market characteristics. In response, the company's leaders created a tiered approach to detach planning activities for some basic appliances whose demand patterns were well understood (rice cookers, for example) from plans for faster-moving products with less certain demand. For the basic products, the company developed a streamlined, "good enough" planning approach. For the high-end goods, it crafted specific plans by product line.

Its results, including an overall improvement in forecast accuracy to more than 65 percent, from 35 percent, have been impressive. Inventory fell from more than 55 days to 30 days, and the company increased its proportion of on-time deliveries to more than 95 percent, from 60 percent. What's more, the changes in the company's planning approach made the work more interesting for its employees, as many of them subsequently received training in advanced forecasting techniques. Consequently, employee turnover among the planning teams went down dramatically-from 50 percent before the effort to just 20 percent afterward. In a second phase, currently under way, the company extended this approach for high-end products to others with similar demand characteristics.

Significantly, the company is separating what had been a monolithic China supply chain into nimbler "splinters" that can better manage complexity. Products with steadier demand go to market in the traditional manner: via coastal distribution centers and large drop-ship orders to retail partners. Higher-end ones travel via smaller regional distribution centers located closer to demand inland. For some products, this approach allows the company to experiment with postponement strategies-finalizing product assembly closer to demand-that help reduce costs and inventory levels (in the case of some customers, by as much as 45 percent).

As companies look to move their footprints closer to customers in Tier-three and Tier-four cities in China's interior, another likely change will be the long-term development of logistics hubs and assets. In this way, those companies will be better positioned to serve booming demand for online purchases (see " China's e-tail revolution "). These investments are risky, and many senior executives we know are worried about overextending their companies. Some describe what they say is a need to "go West-but not too far West." As for domestic Chinese companies with global plans, they know that getting closer to customers means Western customers as well. A few of the largest white-goods makers are thinking about expanding their assembly and test activities in the developed world, because they recognize that they can no longer adequately serve it from Shenzhen and other hubs.

China's rise to manufacturing preeminence in recent years has been amazing. Yet rising costs, more sophisticated consumers, and fundamental macroeconomic realities mean that yesterday's approaches to manufacturing are losing their relevance. For Chinese-owned and multinational manufacturers alike, the imperatives now are to boost productivity, refine product-development approaches, and tame supply-chain complexity. Those that do so can create an enduring competitive edge.

About the author(s)

Karel Eloot is a director in McKinsey's Shanghai office, where Alan Huang and Martin Lehnich are principals.

The authors would like to thank She Guo, Mads Lauritzen, Gregory Otte, Gernot Strube, Min Su, and Forrest Zhang for their contributions to this article.

Report - McKinsey Global Institute

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Companies that continue to base their manufacturing strategies solely on China's rock-bottom wages and stratospheric domestic growth rates are in for a rude awakening. New challenges will require new competitive priorities. China's emergence as a manufacturing powerhouse has been astonishing.

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Getting there means ditching today's monolithic model in favor of splintered supply chains that dismantle complexity, and using manufacturing networks to hedge uncertainty.

Many global supply chains are not equipped to cope with the world we are entering. Most were engineered, some brilliantly, to manage stable, high-volume production by capitalizing on labor-arbitrage opportunities available in China and other low-cost countries. But in a future when the relative attractiveness of manufacturing locations changes quickly-along with the ability to produce large volumes economically-such standard approaches can leave companies dangerously exposed.

That future, spurred by a rising tide of global uncertainty and business complexity, is coming sooner than many companies expect. Some of the challenges (turbulent trade and capital flows, for example) represent perennial supply chain worries turbocharged by the recent downturn. Yet other shifts, such as those associated with the developing world's rising wealth and the emergence of credible suppliers from these markets, will have supply chain implications for decades to come. The bottom line for would-be architects of manufacturing and supply chain strategies is a greater risk of making key decisions that become uneconomic as a result of forces beyond your control.

Against this backdrop, a few pioneering supply chain organizations are preparing themselves in two ways. First, they are "splintering" their traditional supply chains into smaller, nimbler ones better prepared to manage higher levels of complexity. Second, they are treating their supply chains as hedges against uncertainty by reconfiguring their manufacturing footprints to weather a range of potential outcomes. A look at how the leaders are preparing today offers insights for other companies hoping to get more from their supply chains in the years to come.

Twin challenges

The stakes couldn't be higher. "In our industry," says Jim Owens, the former chairman and CEO of construction-equipment maker Caterpillar, "the competitor that's best at managing the supply chain is probably going be the most successful competitor over time. It's a condition of success." Yet the legacy supply chains of many global companies are ill-prepared for the new environment's growing uncertainty and complexity.

A more uncertain world

Fully 68 percent of global executives responding to a recent McKinsey survey said that supply chain risk will increase in the coming five years. And no wonder: the financial crisis of 2008 dramatically amplified perennial sources of supply chain uncertainty-notably the trajectory of trade and capital flows, as well as currency values-even as the crisis sparked broader worries about the stability of the financial system and the depth and duration of the resulting recession. While many of these sources of uncertainty persist, it's important to recognize that new, long-term shifts in the global economy will continue to pressure supply chains long after more robust growth returns.

The increasing importance of emerging markets tops the list of these uncertainties. Economic growth there will boost global energy consumption in the coming decade by about one-third. Meanwhile, the voracious appetite of China and other developing countries for such resources as iron ore and agricultural commodities is boosting global prices and making it trickier to configure supply chain assets. Worries about the environment are growing, too, along with uncertainty over the scope and direction of environmental regulation.

These long-term trends have knock-on effects that reinforce still other sources of uncertainty. Growth in developing countries contributes to volatility in global currency markets and to protectionist sentiment in the developed world, for example. What's more, different growth rates across various emerging markets mean that rising labor costs can quickly change the relative attractiveness of manufacturing locations. This past summer in China, for example, labor disputes-and a spate of worker suicides-contributed to overnight wage increases of 20 percent or more in some Chinese cities. Bangladesh, Cambodia, and Vietnam experienced similar wage-related strikes and walkouts. Finally, as companies in developing markets increasingly become credible suppliers, deciding which low-cost market to source from becomes more difficult.

Rising complexity

Manufacturing and supply chain planners must also deal with rising complexity. For many companies, this need means working harder to meet their customers' increasingly diverse requirements. Mobile-phone makers, for example, introduced 900 more varieties of handsets in 2009 than they did in 2000. Proliferation also affects mature product categories: the number of variants in baked goods, beverages, cereal, and confectionery, for instance, all rose more than 25 percent a year between 2004 and 2006, and the number of SKUs at some large North American grocers exceeded 100,000 in 2009.

Meanwhile, globalization brings complexities as rising incomes in developing countries make them extremely desirable as markets, not just manufacturing hubs. Efficient distribution in emerging markets requires creativity, since retail formats typically range from modern hypermarkets to subscale mom-and-pop stores. In Brazil, for example, Nestlé is experimenting with the use of supermarket barges to sell directly to low-income customers along two tributaries of the Amazon River.

Meeting the challenge

In such a world, the idea that companies can optimize their supply chains once-and for all circumstances and customers-is a fantasy. Recognizing this, a few forward-looking companies are preparing in two ways. First, they are splintering their traditional monolithic supply chains into smaller and more flexible ones. While these new supply chains may rely on the same assets and network resources as the old, they use information very differently-helping companies to embrace complexity while better serving customers.

Second, leading companies treat their supply chains as dynamic hedges against uncertainty by actively and regularly examining-even reconfiguring-their broader supply networks with an eye toward economic conditions five or ten years ahead. In doing so, these companies are building diverse and more resilient portfolios of supply chain assets that will be better suited to thrive in a more uncertain world.

From one to many

Splintering monolithic supply chains into smaller, nimbler ones can help tame complexity, save money, and serve customers better. Let's look at an example.

Splintering supply chains: A case study

A US-based consumer durables manufacturer was losing ground to competitors because of problems with its legacy supply chain. Years before, the company-like many global manufacturers-had sent the lion's share of its production to China while maintaining a much smaller presence in North America to stay close to the majority of its customers. One legacy of the move: all of its plants, relying on a unified production-planning process, essentially manufactured the full range of its thousands of products and their many components.

Now, however, increasingly volatile patterns of customer demand, coupled with product proliferation in the form of hundreds of new SKUs each year, were straining the company's supply chain to the point where forecasting- and service-related problems were dissatisfying key customers.

In response, the company examined its portfolio of products and components along two dimensions: the volatility of demand for each SKU it sold and the overall volume of SKUs produced per week. Armed with the resulting matrix (Exhibit 1), the company began rethinking its supply chain configuration.

Ultimately, the company decided to split its one-size-fits-all supply chain into four distinct splinters. For high-volume products with relatively stable demand (less than 10 percent of SKUs but representing the majority of revenues), the company kept the sourcing and production in China. Meanwhile, the facilities in North America became responsible for producing the rest of the company's SKUs, including high- and low-volume ones with volatile demand (assigned to the United States) and low-volume, low-demand-volatility SKUs (divided between the United States and Mexico). Ramping up production in a higher-cost country such as the United States made economic sense even for the low-volume products because the company could get them to market much faster, minimize lost sales, and keep inventories down for many low-volume SKUs. Moreover, the products tended to require more specialized manufacturing processes (in which the highly skilled US workforce excelled) and thus gave the company a chance to differentiate itself in a crowded market.

However, the company didn't just reallocate production resources. In tandem, it changed its information and planning processes significantly. For the portfolio's most volatile SKUs (the ones now produced in the United States), the company no longer tried to predict customer demand at all, choosing instead to manufacture directly to customer orders. Meanwhile, managers at these US plants created a radically simplified forecasting process to account for the remaining products-those with low production runs but more stable demand.

For overseas operations, the company continued to have its Chinese plants produce finished goods on the basis of long-run forecasts, as they had done before. The forecasts were now better, though, because planners were no longer trying to account in their models for the "noise" caused by the products with highly volatile demand.

Together, the changes helped the company reduce its sourcing and manufacturing complexity and to lower its cost of goods sold by about 15 percent. Meanwhile, it improved its service levels and shortened lead times to three days, from an average of ten. Quality also improved across the company's full range of products.

How many splinters?

The first question for organizations exploring multiple supply chains is how many are needed. Answering it requires a close look at the way the supply chain assets that a company uses to manufacture and distribute its products matches up against the strategic aspirations it has for those products and their customers.

This requirement seems obvious, but in practice most companies examine only the second half of the equation in a sophisticated way; they can, for example, readily identify which products they see as leaders on cost, service, innovation, or (most likely) some combination of these. Fewer companies seriously examine the operational trade-offs implicit in such choices, let alone make network decisions based on those trade-offs.

Oftentimes, a good place to start is to analyze the volatility of customer demand for a given product line against historical production volumes and to compare the results against the total landed cost for different production locations. This information provides a rough sense of the speed-versus-cost trade-offs and can even suggest locations where supply chain splinters might ultimately be located. A global consumer-packaged-goods maker, for example, quickly saw that two-thirds of the demand associated with a key product line (about 40 percent of the company's product portfolio) could be moved from a higher-cost country to a lower-cost one without hurting customer service.

Of course, companies must carefully check these broad-brush analyses against customer needs. The consumer goods company, for instance, found that packaging innovation was a differentiator for some of its products and thus configured a single production line in the new, lower-cost location to make packaging for several markets quickly. By contrast, in automotive and other assembly-based industries, we find that the customers' responsiveness and the complexity of individual products are important inputs that help determine where supply chains might be splintered.

Second-order benefits

While dividing a supply chain into splinters may seem complicated, in fact this approach allows companies to reduce complexity and manage it better because operational assets can be focused on tasks they're best equipped to handle. At the same time, the added visibility that a splintered approach offers into the guts of a supply chain helps senior managers more effectively employ traditional improvement tools that would have been too overwhelming to tackle before.

After the consumer durables maker divided its supply chain into smaller ones, for example, it was able to use formerly impractical postponement approaches (producing closer in time to demand to keep holding costs low). The company's US plants now combined various SKUs into semifinished components that could quickly be assembled into products to meet customer orders (Exhibit 2). Indeed, the lower inventory costs this move generated partially offset the higher labor costs of the US factories.

Likewise, the global consumer-packaged-goods maker found that after splintering its supply chain, it was more successful at applying lean-management techniques in its plants. Among the benefits: much faster changeover times in higher-cost production locations, enabling them to handle product-related complexity more effectively.

Use your network as a hedge

The advantages that multiple supply chains confer are most valuable if companies view them dynamically, with an eye toward the resiliency of the overall supply chain under a variety of circumstances. Will the various strands of a particular global supply network, for example, still make sense if China's currency appreciates by 20 percent, oil costs $90 a barrel, and shipping lanes have 25 percent excess capacity? It's critical for organizations to determine which of the many questions like these are right to ask and to invest energy in understanding the global trends underpinning them. Some companies are already thinking in this way. Nike, for example, long a leader in emerging-market production, manufactured more shoes in Vietnam than in China for the first time in 2010.

In fact, we believe that the ability of supply chains to withstand a variety of different scenarios could influence the profitability and even the viability of organizations in the not-too-distant future. In light of this, companies should design their portfolios of manufacturing and supplier networks to minimize the total landed-cost risk under different scenarios. The goal should be identifying a resilient manufacturing and sourcing footprint-even when it's not necessarily the lowest-cost one today. This approach calls for a significant mindset shift not just from operations leaders but also from CEOs and executives across the C-suite.

At the consumer durables manufacturer, for example, senior executives worried that its reliance on China as a hub could become a liability if conditions changed quickly. Consequently, the company's senior team looked at its cost structure and how that might change over the next five to ten years under a range of global wage- and currency-rate conditions. They also considered how the company could be affected by factors such as swinging commodity prices and logistics costs.

The company determined that while China remained the most attractive manufacturing option in the short term, the risks associated with wage inflation and currency-rate changes were real enough to make Mexico a preferable alternative under several plausible scenarios. Consequently, the company has begun quietly building its supplier base there in anticipation of ramping up its manufacturing presence so that it can quickly flex production between China and Mexico should conditions so dictate.

Similarly, the global consumer-packaged-goods manufacturer is examining where dormant capacity in alternative low-cost countries might help it hedge against a range of labor cost, tariff, tax, and exchange-rate scenarios. The company is also factoring in unexpected supply disruptions, including fires, earthquakes, and labor-related strife.

A North American industrial manufacturer chose to broaden its footprint in Brazil and Mexico to hedge against swings in foreign-exchange rates. In particular, the company invested in spare capacity to make several innovative, high-end components that it had formerly produced only in Europe and the United States because of the advanced machining and engineering required. The investment is helping the company hedge against currency swings by quickly transferring production of the components across its global network to match economic conditions. Moreover, the arrangement helps it better support its supply partners as they serve important growth markets.

Making these kinds of moves isn't easy, of course, since any alterations to a company's supply chain have far-ranging implications throughout the organization. For starters, such changes require much more cooperation and information sharing across business units than many companies are accustomed to. Indeed, the organizational challenges are so significant that for many companies, a hands-on effort by the CEO and others across the C-suite is needed for success (for more, see " Is your top team undermining your supply chain? ").

Nonetheless, the rewards are worthwhile. By creating more resilient and focused supply chains that can thrive amid heightened uncertainty and complexity, companies will gain significant advantages in the coming years.

About the author(s)

Yogesh Malik and Brian Ruwadi are principals in McKinsey's Cleveland office; Alex Niemeyer is a director in the Miami office.

The authors wish to acknowledge Sebastien Katch for his valuable contributions to this article.

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Getting there means ditching today's monolithic model in favor of splintered supply chains that dismantle complexity, and using manufacturing networks to hedge uncertainty. Many global supply chains are not equipped to cope with the world we are entering. Most were engineered, some brilliantly, to manage stable, high-volume production by capitalizing on labor-arbitrage opportunities available in China and other low-cost countries.

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Manufacturing the future: The next era of global growth and innovation

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Manufacturing remains a critical force in both advanced and developing economies. But the sector has changed, bringing new opportunities and challenges to business leaders and policy makers.

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Manufacturing the future: The next era of global growth and innovation

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Manufacturing remains a critical force in both advanced and developing economies. But the sector has changed, bringing new opportunities and challenges to business leaders and policy makers.

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China GDP Annual Growth Rate | 1989-2017 | Data | Chart | Calendar

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The Chinese economy expanded 6.9 percent year-on-year in the March quarter of 2017, compared to a 6.8 percent growth in the fourth quarter 2016 and slightly above market consensus of a 6.8 percent growth. It was the strongest expansion since the September quarter 2015, supported by faster rises in industrial output, retail sales and fixed-asset investment while fiscal spending surged.

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China Railway Import and Export Company and Kerry Logistics (China) Sign Strategic Cooperation Agreement

Railway Import and Export Company ("China Railway") and Kerry Logistics (China) Investment Limited ("Kerry Logistics (China)"), a subsidiary of Kerry Logistics Network Limited ("Kerry Logistics", stock code 636.HK) announced it had signed a strategic cooperation agreement at a ceremony held on 3 April 2015 in Beijing. The agreement will leverage China Railway's extensive railway network and experience in undertaking key domestic and international projects, and effectively integrate Kerry Logistics' strong network in Southeast Asia and logistics service expertise. The strategic cooperation follows the national "Going Out" development strategy, for China's large-scale enterprises to take full advantage of the new growth opportunities brought on by the "One Belt One Road" initiative.

General Manager of China Railway Mr HUO Hongguang and President of Kerry Logistics (China) Mr Edwardo ERNI shared the same view that the move is an important measure taken under the new national strategy for both companies to strengthen their capabilities and further developments. In the future, to realise the potential of the "One Belt One Road" strategy, both sides will work together closely for the long-term growth and development of their businesses. They will jointly explore new growth opportunities by broadening their strategic partnership, in an effort to contribute to China's growth and advancement on the global stage.

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One belt one road. China Railway and Kerry Logistics working together.

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China Railway Import and Export Company and Kerry Logistics (China) Sign Strategic Cooperation Agreement Railway Import and Export Company ("China Railway") and Kerry Logistics (China) Investment Limited ("Kerry Logistics (China)"), a subsidiary of Kerry Logistics Network Limited ("Kerry Logistics", stock code 636.HK) announced it had signed a strategic cooperation agreement at a ceremony held on 3 April 2015 in Beijing.

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HBR Article Advanced Manufacturing

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The global manufacturing sector is on the threshold of a dynamic new phase that will provide renewed opportunity for manufacturing firms - and a host of new challenges. Incumbents who can rise to the challenge - and upstarts who may find lower barriers to entry - could do very well, indeed.

What has changed to encourage such an upbeat view of manufacturing? We see two forces that will dominate global manufacturing in the coming decade. First we see major shifts in demand: developing economies such as China and India are morphing from the world's source of low-cost manufacturing capacity to the world's best market opportunities. In addition, customers everywhere are looking for more - including more services - from manufacturers. Second, we see a raft of innovations that will alter how products are designed, manufactured and sold - everything from nanotechnologies to 3D printing.

These forces will shift the dynamics of the global manufacturing sector. They will not, it must be noted, alter how the role of manufacturing evolves as economies develop. Manufacturing remains the driver of growth and employment when nations are developing - witness what's happening in China - and becomes less important as economies become wealthier and their service sectors account for the bulk of growth and employment. Then, manufacturing's most important role is as a driver of innovation, trade, and productivity. The new era will give manufacturing companies an opportunity to help their host economies in all of those areas; it will create high-skill jobs, particularly in design, big data, and other service roles, but not masses of production-line positions.
Demand is Shifting
Let's take a look at the demand shifts that will define this new phase. Overall demand is fragmenting, both geographically and in terms of what customers require - more options, faster product cycles, more customization and after-sale service. Consumers want more variety, more frequent upgrades, and greater customization. Increasingly, customers demand more after-sale service; this is the norm now in business-to-business sales, but will spill over to consumer goods, too, thanks to some of the technology advances we'll talk about below.

The megatrend in demand, of course, is the shift to developing economies. It is well known that China, India, and other developing economies in Asia and Latin America have been leading global growth. What is less well understood is how quickly demand is following that growth. According to recent McKinsey research (see " The $30 Trillion Decathlon "), consumption by developing economies could rise from $12 trillion annually in 2010 to $30 trillion in 2025, by which time these markets could account for nearly 70% of global demand for manufactured goods. Importantly, this emerging market demand is also highly fragmented; not only is there a huge difference between what the customer wants in Indonesia and India, but also within countries. McKinsey has identified more than 20 distinct submarkets in China, for example.
Innovations Are Changing The Way We Design Products
On the innovation front, the opportunities are more diverse, but equally powerful. We see advances in materials, processes, and information technology that will make possible entirely new kinds of products and can radically alter how manufacturers operate. Nanotechnologies will potentially create a new era in microelectronics. Materials such as lightweight steel and aluminum and carbon fiber are being introduced into auto manufacturing, helping to create new lightweight vehicles that will soon be seen on the streets of Asia's megacities. All over the world, automakers are mastering new drive train technologies. Pharmaceutical companies are mastering bio-engineering techniques that will help develop personalized medicines.

Many of the most interesting advances are in new production processes and new information technologies. So-called additive manufacturing techniques such as 3D printing, which create objects by combining small particles rather than by casting or stamping, open up all sorts of possibilities. More than 6,500 3D printers were shipped in the United States last year. They are used mostly for assembling models and prototypes, but also have been used to make intricate aerospace components and even replacement human organs. Robots are gaining new capabilities at lower costs and are increasingly able to handle intricate work. And big data is being applied across the manufacturing value chain, starting with billions of bytes of data collected from social media sites to understand what products to build, guiding production machinery on the shop floor, and monitoring products that are in use. With sensors and transponders, products can constantly feed performance data back to the manufacturer, enabling all sorts of new after-sale services.

These opportunities arise in a far more uncertain environment than existed before the Great Recession. Commodity prices have risen, wiping out the declines that marked most of the 20th century and wages are rising rapidly in what have been regarded as low-wage locations such as coastal China. Increasingly frequent natural disasters such as the Japanese tsunami have made clear how risky complex global supply chains can be.
The Dynamics of Global Manufacturing Are Shifting
In this environment, manufacturing companies are rethinking their location strategies and not simply following the path of lowest wages. Rock-bottom wages matter a lot in some segments, such as garment manufacturing, but in most manufacturing industries, hourly labor is less than 20% of costs. A bigger challenge for many manufacturers is access to high-skill talent, both for the shop floor and for a growing number of service-like occupations within manufacturing.

It is important to remember that manufacturing is not monolithic and that there is a wide range of manufacturing industries - from the very labor-intensive and resource/energy-intensive to the very R&D intensive. We identify five major groups (see chart: "Manufacturing is Diverse"), in which the inputs that define success vary. Advanced economies, for example, depend more on high-skill talent to support what we call "global innovation for local markets" in industries such as pharmaceuticals and autos. Advanced economies run a $726 billion surplus in such goods, against a $342 billion deficit in labor-intensive goods. When we look at the needs of different manufacturing industries and the sources of growth in manufacturing demand, we see that while "re-shoring" - shifting some jobs back to wealthy nations - is a welcome development that may help restore some of the huge losses that manufacturing suffered in the past decade, it is unlikely to reverse the long-term trend in manufacturing employment.

To make sure location decisions line up with these input needs, we recommend a more nuanced "total factor performance" approach. This takes in not only all the variables that can affect the total landed cost of a product (transportation and labor costs, access to commodities, energy prices, talent availability, proximity to suppliers, customers, and research clusters, regulation etc.), but also the risks.

A nation that has low labor rates and energy prices, talent availability, proximity to suppliers, customers, and research clusters, and favorable regulation today may not have these things tomorrow. Manufacturers must ask: what is the risk of being trapped with unproductive capacity by locating here? Government policy is a powerful force in such consideration; it can remove barriers to expansion and help develop a nation's talent and infrastructure, or it can sharply limit flexibility and market access - despite today's webs of free-trade agreements. Supply chains and footprints must not only reach all the right places, but they also must be resilient.

The net of all these changes, we believe, will be a new kind of manufacturing company. To take advantage of the opportunities available to manufacturers - and to avoid falling behind - companies have to become agile, networked, analytical, and data-driven enterprises. Manufacturing leaders will need to manage not only across geographies, but across their own organizational silos and beyond to a virtual ecosystem of suppliers and partners. Many companies will need to build new capabilities. For example, in a world of rising and complex risk, they will need to adopt planning systems that don't rely on point forecasts, but use scenario planning. Companies will need to develop skills in big data and to compete in a world where the supply of high-skill talent is tightening, manufacturers will have to become much better at attracting, developing, and retaining talent.

This new era of manufacturing will provide opportunities for global leaders in the sector to tap into new markets and new ways to innovate. It will also see the arrival of new players - upstarts and new global players from developing economies. This contest will continue to drive productivity and innovation around the world.

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Get Ready for the New Era of Global Manufacturing

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The global manufacturing sector is on the threshold of a dynamic new phase that will provide renewed opportunity for manufacturing firms - and a host of new challenges. Incumbents who can rise to the challenge - and upstarts who may find lower barriers to entry - could do very well, indeed.

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Rare Earth Minerals 'Monopoly' Newspeice

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The following is a script from "Rare Earth Elements" which aired on March 22, 2015, and was rebroadcast on July 19, 2015. Lesley Stahl is the correspondent. Graham Messick and Kevin Livelli, producers.

What do cars, precision-guided missiles and the television you're watching right now have in common? They all depend on something called rare earth elements, unusual metals that are sprinkled inside almost every piece of high-tech you can think of. Most people have never heard of them. But we have become so reliant on rare earths that a few years ago, an intense global power struggle broke out over their free flow. The reason is that one country has a virtual monopoly - roughly 90 percent -- of the mining, refining and processing of rare earths -- China. And in 2010, it used that power to disrupt the world's supply. As we first reported last March, it's especially troubling, because it was the United States that started the rare earth revolution in the first place.

It all began here at this mine in Mountain Pass, California, an hour west of Las Vegas, when geologists first identified rare earth elements deep in the Mojave Desert. They were considered geological oddities, until the 60s when it was discovered that one of these elements, "europium," enhanced the color red in TV sets and soon the rare earth industry was born.

[TV commercial: CBS presents this program in color!]

Constantine Karayannopoulos: Rare earth chemistry is fascinating. There's so many more things that we could be doing with rare earths.

Constantine Karayannopoulos, chairman of Molycorp, which has owned and operated the Mountain Pass mine for six decades, took us to the heart of the operation.

Lesley Stahl: Is this considered a big mine?

Constantine Karayannopoulos: In terms of rare earth standards, yes. It's one of the biggest in the world.

Lesley Stahl: Are we actually walking on rare earth elements right now?

Constantine Karayannopoulos: We're physically on the ore body.

Lesley Stahl: We are right on it?

Constantine Karayannopoulos: It starts at the top of the mine, then comes down and we're walking on it and it goes in that direction.

So what are rare earth elements? If you ever took high school chemistry you learned that they're clumped together at the end of the periodic table...atomic numbers 57 through 71... and they have difficult-to-pronounce Greek or Scandanavian names.

Constantine Karayannopoulos: Lanthanum, cerium, neodymium, praseodymium, samarium, terbium...

Some of them are phosphorescent. Erbium amplifies light, and is used in fiber-optic cables. Gadolinium has magnetic properties and is used in MRI machines and X-rays. As for neodymium? You may be carrying some of it in your pocket.

Constantine Karayannopoulos: Next time your phone vibrates, think of us because the vibration motor is a small motor that contains a tiny neodymium magnet in it.

Karayannopoulos showed us around a new model home to illustrate that rare earths are making our appliances energy efficient like state-of-the-art refrigerators, touch screen thermostats, energy efficient light bulbs, the air conditioning systems. They're also in our cars in the form of catalytic converters, sensors and hybrid car batteries.

Constantine Karayannopoulos: Hybrids, in particular use a lot more because they contain electric motors that would not function without rare earths.

A Prius has roughly 25 pounds of rare earths. And they're hidden in plain sight in our every day lives, in our computers and gadgets, even the lights and cameras we used to film this story are chock full of rare earths.

Lesley Stahl: What I'm getting from you is that modern life depends on these elements.

Constantine Karayannopoulos: Absolutely.

Despite their name - rare earths are not rare. Small amounts can be found in your backyard. They're trapped in what looks like ordinary rock.

But there are only a few places on earth with concentrations high enough to mine.

Constantine Karayannopoulos: Rare earths normally are found in very, very low concentrations. This is probably running something in the 25 percent grade.

Lesley Stahl: That's good?

Constantine Karayannopoulos: Which is remarkable. To anyone who has ever worked with rare earths, this is a thing of beauty.

But getting the rare earths out of that rock is nasty business requiring toxic acids and lots of water. In fact, the mine was shut down by the state of California in 1998 after radioactive water seeped into the surrounding Mojave Desert from an underground pipe. The mine lay dormant for a decade, giving China an opportunity.

Dan McGroarty: The Chinese made a very conscious decision to enter that industry.

Dan McGroarty was special assistant to President George H.W. Bush and today advises the U.S. government on critical materials. When the Molycorp mine closed, he says China was already well on its way to becoming the king of rare earths.

Dan McGroarty: There's a point at which the lines cross. The United States production declines. Chinese production's ramping up. Those lines cross somewhere around 1986.

Lesley Stahl: So how did they pull it off? What were the factors that allowed them to basically take this away from us?

Dan McGroarty: Well, the advantage of lower labor costs, would be a place to start. Also, environmentally, very, almost no environmental constraints around mining--safety considerations for the miners doing mining, in huge contrast to the United States. So, that translates directly into lower pricing. And lower pricing can push other people out of the market.

Lesley Stahl: And that's basically what happened?

Dan McGroarty: That's basically what happened.

The Chinese also had orders from the top. In a little-noticed speech in 1992, Deng Xiaoping signaled China's intention to corner the market.

Lesley Stahl: What exactly did he say?

Dan McGroarty: 'The Middle East has oil. China has rare earths.'

Lesley Stahl: He actually said that, Deng Xiaoping.

Dan McGroarty: Actually said that. I think it's fair to say, at that point, people in the rest of the world, who had been saying, 'What are - what is he talking about?'

Lesley Stahl: Just went right over our heads.

Dan McGroarty: I think so.

Lesley Stahl: Did we just not foresee what they foresaw?

Dan McGroarty: It's extraordinary if they actually foresaw all the uses. Our designers and developers advanced the miniaturized applications for laptops and cell phones while the Chinese were going after the metals and materials out of which these things are actually built.

Lesley Stahl: How did they get the know-how?

Dan McGroarty: An enormous amount of investment. It's kind of like the Chinese moon shot, the moon program.

China poured billions into the industry, ignoring the consequences. We obtained this video from a freelance cameraman showing the area near Baotou, China's rare earth capital, where the air, land and water are so saturated with chemical toxins, the Chinese have had to relocate entire villages. This is one of the few places where rare earths are turned into metals, which are then alloyed -- or blended -- into things like permanent magnets.

Ed Richardson: These are magnets that once you magnetize them, they stay that way.

Ed Richardson, president of the U.S. Magnetic Materials Association, says the most important use of rare earths is in magnets. Only a small amount can produce magnets able to lift a thousand times their weight.

Ed Richardson: This is a cell phone.

He showed us how miniaturized rare earth magnets can be.

Ed Richardson: So I'm going to take it apart layer by layer and we're going to get to the point where we can actually see the magnets, the rare earth magnets that are inside there.

Lesley Stahl: Oh, let me see this.

Ed Richardson: There's three little magnets in there.

Lesley Stahl: Oh, one, two, three.

Ed Richardson: Right. If you put the paperclip you can see how it sticks.

Lesley Stahl: And this little tiny thing is the speaker.

Ed Richardson: Right. This is how devices have gotten small, very powerful, because the magnets are so powerful, you don't have to use much of it.

The U.S. developed this technology, but China bought most of it right out from under us. For instance, in 1995, China bought the biggest American rare earth magnet company, "Magnequench" which was based in Indiana.

Ed Richardson: When they bought the factory, they now had the patents. They now had the equipment. And they actually had some of the Magnequench employees in the United States go to China and teach the people how to make the products.

Lesley Stahl: Did we not understand the strategic importance of keeping that industry here?

Ed Richardson: We didn't get it and unfortunately the technology was transferred to China before that technology was appreciated. And now, we're seeing so many, for instance, defense systems that are dependent on it.

Lesley Stahl: Does that make us dependent on China for our defense systems?

Ed Richardson: Oh, we are very dependent on China.

Lesley Stahl: We are dependent on China for our weaponry.

Ed Richardson: Right.

A prime example of that is the new F-35 fighter jet, the most technologically advanced weapons system in history. Each one contains nearly half a ton of rare earths. Former White House Official Dan McGroarty says that's just for starters.

Dan McGroarty: The guidance systems on weapons system and tomahawk cruise missile, any of the smart bombs have rare earths in them. Lasers. I'd be hard-pressed to name anything that we would consider worth building today and going forward that would not have a rare earth compound in it.

Lesley Stahl: Because of this. Because of the monopoly on rare earths, does China threaten our national security?

Dan McGroarty: Unchecked, yes.

What finally woke up the U.S. government was an incident at sea in 2010. A Chinese fishing trawler rammed a Japanese coast guard ship in a territorial dispute.

The Japanese seized the boat's captain... and two weeks later, China stopped shipping rare earths to Japan.

Dan McGroarty: The Chinese cut them off. And for 30 to 40 days, the rare earths did not flow to Japan. So it was a real shot across the bow for the Japanese that this is something that you have to be worried with.

It was a wake up call. Finally, 20 years after Deng Xiaoping's speech, rare earths were on the U.S. radar screen.

[President Obama: This case involves something called rare earth materials...]

President Obama announced a formal complaint to the World Trade Organization against China for creating shortages for foreign buyers and last August the WTO ruled against Beijing.

No one in the Obama administration would talk to us on camera about rare earths and our dependence on China... including the Department of Energy... the Pentagon... or the U.S. trade representative. Even the private sector didn't want to discuss the problem.

Lesley Stahl: We tried to get interviews with heads of companies that use the magnets and other products coming out of China, and they would not talk to us. Is there fear in high-tech companies that if they say something negative, maybe China won't sell them what they need?

Dan McGroarty: I think that there is grave concern in these companies, but perhaps not a willingness to talk about that on a street corner.

So what is the U.S. doing to restore the industry here? Out in California, Molycorp was allowed to re-open after it developed new technology that protects the environment. But even when it's at full capacity, the mine will only produce a fraction of the world's supply of rare earths.

The Pentagon has begun stockpiling rare earths, and industry is researching new technologies that would replace them.

Lesley Stahl: Do you get any help from the U.S. government? They want to have a rare earth industry here.

Constantine Karayannopoulos: Encouragement, yeah.

Lesley Stahl: Encouragement, that's it?

Constantine Karayannopoulos: Yeah.

The government is not offering incentives like tax breaks or subsidies that would lure businesses into the market.

Lesley Stahl: What needs to change to bring more of the industry back to the United States?

Constantine Karayannopoulos: First of all, we need to take a long-term view. It took 20 years to lose the dominant position-- at least 20 years. And it's probably going to take us 10, 15 years, if we execute, for some of these supply chains to start coming back.

But trouble is once again looming for the U.S. rare earth industry. Since restarting operations two years ago, Molycorp's mountain pass mine has yet to turn a profit, and so deeply in debt, it recently filed for chapter 11 bankruptcy.

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The following is a script from "Rare Earth Elements" which aired on March 22, 2015, and was rebroadcast on July 19, 2015. Lesley Stahl is the correspondent. Graham Messick and Kevin Livelli, producers. What do cars, precision-guided missiles and the television you're watching right now have in common?

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World Bank Hi Tech Export Data

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this is my script . pleas check and give me suggestion

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Hi guys, there are two resources that you can use.

PIMCO 2015, Understanding investment opportunities in China, Global Investment Authority, retrieved 28 September 2015,

< http://europe.pimco.com/EN/OurFirm/Pages/OurFirmOverview.aspx>

Trading Economics 2015, China GDP annual growth rate, Trading Economics, retrieved 28 September 2015,

<http://www.tradingeconomics.com/china/gdp-growth-annual >

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this is my ppt. pleas check and give me suggestion

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I modified my PPT and sent to you, you guys just skim through it. If any problem, please tell me.

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Hey Guys! Please see a summary below:

Introduction - Demi -We are the Fantastic 4. -Thank audeince -We have two exciting opportunities in China for you to invest in Logistics and Advanced Manufacturing Chris will tell you about advanced manufacturing Tim will tell you about logistics Yui will conclude the presenatation and tell you how you can invest in these industries. -China is a good place to invest overall (reasons) -Pass you over to Chris to tell you about advanced manufacturing in China

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hi guys

http://www.stats.gov.cn/english/

this website is useful for your guys to collecte data

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Hi guys,
The attachment is my work please check and give me suggestions.
Cheers! Demi

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this is my fixed documents