Since the industrial revolution, manufacturing has been one of the most important sectors, especially in a developing country. It is often regarded as the backbone of a country’s social and economic development and significantly contributes towards its economic growth. This has been supported by the prominent Cambridge economic graduate Nicholas Keldor, who has occasionally been quoted, as stating that manufacturing is “the main engine for fast growth”. It is, thus, no surprise that manufacturing is also one of the most expensive sectors in a country. Where this is so, a company attempting to profit in their business may look into the labour costs in other regions.
Outsourcing manufacturing to another country is a common practice when a company requires a good or item to be produced at a competitive market price. However, the overall profit a company will receive without sacrificing the quality of the product in question will depend on the total production cost spent. Hence, a business will always consider a manufacturer that charges low rates. In this regard, the U.S News Best Country rankings recently published the Best Countries for 2022, whose results helped also determine the Countries With The Cheapest Manufacturing Costs for 2022. The study includes the ranking of 85 countries, with the top 10 countries with the cheapest manufacturing costs as follows:
- Sri Lanka
An Overview of the Ranking List
This is the seventh consecutive year a report of this nature has been published. It is, however, the first time India has surpassed China, which supposedly has had the lowest manufacturing cost for over a decade. In considering the factors used to carry out the research, it must first be noted that the U.S. News Best Countries rankings are a project in partnership with BAV Group and the Wharton School of the University of Pennsylvania. The project currently includes 26 ranking studies, with the main focus on ranking the Best Countries. One of the ranking lists that resulted in the main study was the one related to the manufacturing sector. Other ranking lists associated with the Best Countries study include Best Countries for Women, the Best Countries to Raise Kids, the Best Countries for Racial Equality, the Best Countries for Education, and more. All rankings were based on a survey of more than 17,000 global citizens, assessed on 73 dimensions. The goal of publishing this survey was to consider the potential a country has to drive trade, travel, and investment into the country and determine the extent to which factors or industries affect national economies.
Why Only 85 Countries?
The countries the study considered had to meet three criteria. Hence, only countries that were:
- Within the first 100 in terms of gross domestic product in any year between 2016 to 2020, based on World Bank data
- Within the first 100 foreign direct investment inflows in any year between 2016 to 2020, based on World Bank data
- Within the first 100 countries in terms of international tourism receipts or tourism arrivals in any year between 2016 to 2020, based on World Bank data
- Within the first 150 countries in the U.N.’s Human Development Index in any year between 2015 to 2019
But Does This Mean All the Top 10 Countries in the List Are the Top 10 Manufacturing Countries?
- China – 28.7% Global Manufacturing Output
- United States – 16.8% Global Manufacturing Output
- Japan – 7.5% Global Manufacturing Output
- Germany – 5.3% Global Manufacturing Output
- India – 3.1% Global Manufacturing Output
- South Korea – 3% Global Manufacturing Output
- Italy – 2.1% Global Manufacturing Output
- France – 1.9% Global Manufacturing Output
- United Kingdom – 1.8% Global Manufacturing Output
- Indonesia – 1.6% Global Manufacturing Output
Asia Is the Best Region for Manufacture
Interestingly, most countries with the cheapest manufacturing cost list are centric on the Asian region. When looking at the top 10 manufacturing countries worldwide, it is worth noting that four of them are in the Asian region. Hence, whether it is to find the lowest manufacturing costs or even the best countries with a dominant manufacturing industry with strong economies in the making, looking towards services or solutions in the Asian region is now a well-known fact.
Lending a Hand for Manufacturers to Save Their Overall Costs and Resources in a Sustainable Manner
As the manufacturing industry is in demand and the costs and resources borne by countries with active manufacturing hubs are immense, a feasible way to save overall finances and resources is through the infusion of industry 4.0 technology. From artificial intelligence to machine learning, digital twins, predictive and prescriptive analytics, the Industrial Internet of Things and others, infusing a compact solution that can digitalise a manufacturing factory is a great way to cut costs. Not only does this help manufacturing companies to follow sustainable practices, but to optimise and streamlines in-house operations. In this respect, countries should look into integrating innovative software solutions developed by leading digital vendors.
Cerexio MES: Recognised as the Best Software Suite for Manufacturers in Asia and as One in the World
Cerexio MES is a robust manufacturing execution system in Asia that is regarded as the best-specialised software for manufacturers. It is powered by state-of-the-art technologies, including digital twins, automated process scheduling tools, augmented reality and virtual reality, IIoT, AI, ML, data analytics and more. Maximise labour utilisation, Improve yield, throughput & quality, minimise CO2 emission and related energy costs, and track the condition of your manufacturing assets via one integrated smart screen. The solution allows you to increase labour demands, and diminish labour retention rates with automation, thereby guaranteeing optimal labour utilisation. Eliminate downtime, asset breakdowns and unnecessary expenses with Cerexio MES. By incorporating this solution, you also are able to brand yourself as a sustainable manufacturer that eliminates the need for paper and monitors your energy output.
Connect with Cerexio to learn how you can gain end-to-end control over your manufacturing operations within a single console.
Digital Solutions as the Ideal Cost Saver
As manufacturing companies worldwide attempt to think of strategies that can help them reduce their overall costs to meet the global demand for their services, digital solutions are at the forefront to help them do so. With the rising demand to ensure such companies also meet sustainable standards, a robust and compact digital solution such as Cerexio MES could be your ideal saviour.