Home > Trends and perspectives > Italian manufacturing companies are still going global, but…

Italian manufacturing companies are still going global, but…

Yesterday ISTAT (the Italian National Institute of Statistics) released the results of a research on Italian multinational companies (sorry the page is still in Italian). The research considered 6,173 Italian multinational companies and how they  have evolved in the last years (the time frame is 2009 – 2011). Several interesting results are in the report but I was interested by two elements. First of all, in the last two years companies have increased their investments abroad; mainly these investments have been concentrated in Romania, Brasil and China (two of these countries are characterized by a very low cost of labor. At first I interpreted this results as Italian companies moving their production units abroad to reduce costs, and I admit I was somehow annoyed by this evidence. Quite interestingly however these companies report that the main benefits of having foreign branches are (in order of importance – in brackets the frequency of the element): access to new markets and local services for customers (78.7%), logistics and distribution (56.6%),  labor cost (42.1%), access to competences (41.9%), new product development (41.3%). Italian companies have indeed invested in manufacturing activities abroad but mainly to expand their markets and not to abandon their country. I see this result with optimism; now it is time to see if we will be able to make ends meet…

It is also important to consider that going global is a strategical decision and companies making this decision with limited attention can be highly risky. In a paper, we recently showed that choosing localization of production without a strategical approach has a direct impact on operational performance. So pay attention when you move production that you have clear in mind why you are doing that.

Source:

Golini R., Kalchschmidt M., Threats of sourcing locally without a strategic approach: impacts on lead time performances, Reiner G. (Edited by), Rapid Modelling for Increasing Competitiveness, 2009, IV, 277-292, Springer

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