Canada will be the primary foreign focus of U.S. manufacturers in the years ahead, followed by Western Europe and Japan, according to a study by the consulting firm Deloitte & Touche.
Five of seven major industries included in the survey rated Canada as their leading target market for the next three years. Western Europe ranked a very close second."Selling in Canada can be done fairly easily, so it's not surprising that it tops the list. But I'm also seeing a lot more interest in the Far East," said Robert Rohleder, co-director of the international services group for Deloitte & Touche.
The survey, which included responses from 872 companies, also revealed that the majority of U.S. manufacturers are not interested in setting up overseas plants; they simply want to sell their U.S.-produced products abroad.
The seven industries in the survey were: food, basic industry, fabricated metal, machine tools, electronics, transportation/automobile and aircraft/ aerospace. Of those, the machine tool, electronics and aircraft/aerospace industries showed the most interest in expanding overseas.
The machine tool industry was by far the most committed in pursuing opportunities all around the world, according to the survey. Machine tool companies identified seven world regions as important in the future, four more than any other industry.
Although the survey indicates that U.S. manufacturers are increasingly interested in expanding overseas, it also reveals a big technological gap between world-class companies and other manufacturers.
For example, 85 percent of the companies that identified themselves as world-class, said they had "moderate experience" with computer-aided design, compared with 70 percent of non-world class manufacturers.
Similarly, 74 percent of world-class manufacturers had at least moderate experience with manufacturing resource planning, vs. only 59 percent of other companies. Manufacturing resource planning is a relatively inexpensive, so- called soft technology.
"These non-capital intensive techniques, aimed at improving the infrastructure of an organization, are where world-class companies have most distanced themselves from all other manufacturers," said James Schuetz, a partner in Deloitte & Touche's manufacturing, distribution and services group.
Moreover, the technology gap between world-class and other companies is likely to grow in the coming years as world-class companies begin to realize a return on their investment in technology.