Article Description : This article titled ‘Manufacturing suppliers – Sourcing in Korea’ demonstrates an overview of the current Metalworking manufacturing market of Korea.
The Korean manufacturing sector is considered as one of the world’s leading industrial economy for procurement and purchasing. This industry is an active competitor of global giants in the Industry 4.0 era. Korea stands 3rd in the Global market for producing large number of machines. This high-cost destination for manufacturing has its own advantages that makes the country’s market lead the race among other global giants. The manufacturing sector of Korea has evolved largely. It has adapted to automation as a measure of refining its market in accordance with the latest technologies.
The advancements include :
In addition to this, the country also focuses on Research and Development projects to incorporate cyber physical systems in its upcoming projects and proposals. This reinforces the market to increase its productivity and lower the cost of production in various segments of the industry.
The support and involvement of the Korean government is very intense in terms of procurement management. Several beneficial measures are undertaken to provide the country an advancing trajectory in the manufacturing sector. The production of metals and its related commodities contribute a large part of the overall manufacturing sector of Korea. With utmost awareness about the need for backing for the sector, the Korean government has a set of conveniences for the industry. It promotes Foreign direct investments in the country and cost-less trade opportunities to several manufacturers. Particularly it focuses on the machine and manufacturing zone upgrades in the small and medium enterprises (SMEs). Similarly, it aims to accelerate efficiency and productivity by complete automation of industrial zones.
It is very evident that the Global market is growing at a very fast pace. Several countries are finding it as a great challenge to dive into the automation era. This imposes a pressure on the market to evolve on par with uncertain customer requirements. But Korea has taken up the challenge by reinforcing the target to develop the most recent technologies. Simultaneously, the country also focuses on ousting the defects in the strategies. In support to the same, the Government has hugely invested in process development with implementation of smart factories. This has been stimulated by the joint ventures with foreign establishments and acclimation to their automation.
Although the support by the Government is a stimulant factor for the market, the country is expected to face headwinds in the coming years. The factors include unstable economic activity of certain countries impacting imbalance in global market, fluctuations in weaker segments of the process chain, and conventional market dryness. The internal units of the markets and local markets also stumble when it comes to the pace of improving their competency. Weaker currency value (Won) in the export scenarios adds as another reason of instability during the procurement process.
This is mainly due to South Korea’s trade dispute with Japan. The machinery and equipment market of South Korea is highly dependent on Japan. Due to trade friction between these two countries, Japan has implemented a restriction on the export of semi conductors to South Korea. This has heavily pushed down the growth of the manufacturing sector. Eventually, Korea is now in a situation to adapt to self dependency of technologies. But the biggest challenge is the regulatory policies of Korea which do not completely support the investments and other influencing factors of the industry. This directly means that, there exists regulatory challenges in terms of upgrade to the latest technologies. However, the expert opinions on field are collected by companies to derive a sustainable strategy.
In addition to this, the highly functional nature of the Korean market counteracts the shortcomings by making smarter moves. It aims to identify the robust areas that could hold strong the market beyond the segments that are trending down. Consequently, the country also focuses on associating with Global giants to bring in an external balance during sourcing process. Researches are carried out to develop innovative production techniques and to make enhancements in various phases of the procurement cycle. Policies are adopted to keep up the activity of the sector at a normalized range. This justifies keeping up the hope in efficient supplier scouting in Korea.
Essentials to consider for supplier sourcing in Korea :
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