For years, China has been considered the “factory of the world,” but today, the country is facing increasing competition from newly emerging economies and highly-industrialized countries attempting to take a larger slice of its low-cost manufacturing base.
Among the competition, supply chain disruptions, sustainability concerns and geopolitical tensions, a combination of factors has led businesses to look to new options for their manufacturing needs. At the same time, more sophisticated manufacturing technology is on the rise, offering complementary or alternative production options. Now, the question is: Will the “factory of the world” continue to be a single, central location? Or will the future of manufacturing take place in a more advanced manufacturing ecosystem distributed around the world?
The Distributed Factory Of The World
In recent years, experts have been predicting that a shift toward smaller-scale, decentralized manufacturing will soon take place, bringing production closer to end customers. Today, distributed manufacturing is continuing to gain traction, driven by the pandemic, technological advancements, regulatory pressure to reduce carbon emissions and the odd container ship stuck in the Suez Canal. New manufacturing technologies play an important role in this shift, by enabling companies to move away from mega factories to smaller, more flexible plants.
In January 2021, University of Cambridge professor Jaideep Prabhu predicted this year would be the time for small-scale, distributed manufacturing to take on a more prominent role in manufacturing. He pointed to the rise in digital manufacturing tools, increased labor costs in China and concerns with the costs of shipping as drivers for economies to pull manufacturing closer to customers.
Chinese manufacturers themselves seem to be aware of this potential shift. My company recently conducted a survey of 127 Chinese manufacturers, with results supporting this view. Half of those surveyed believe that the global adoption of 3D printing and other smart production technologies and tools can challenge China’s position as a manufacturing leader. To maintain its competitive edge, the country is modernizing its industrial capability by embracing high-tech intensive manufacturing.
Introducing Distributed Manufacturing In Your Operations
With advances in technology and increasing external drivers, companies now have an opportunity to look at their own supply chains to see what this shift toward micro-manufacturing means for them.
For those looking to shorten and localize supply chains, the first step is often to explore ways to integrate new technologies within existing manufacturing environments, targeting the applications best suited for technologies like 3D printing, CNC machining, smart factories and manufacturing execution systems alongside traditional processes. While these will not replace every link in the manufacturing supply chain, they are often applications that can provide value in terms of supply chain efficiency or environmental sustainability.
In one example, my company recently worked with a global capital goods manufacturer facing a supply chain gap for a small but vital component that was not available due to Covid-19-related shipping restrictions. Stopping assembly until the missing parts arrived would have meant a loss of 189,000 euros. Instead, relying on 3D printing to create this one part locally, the company was able to supplement its existing supply chain, avoid costly stoppages and fulfill their customers’ orders.
You can find examples like this across other industries as well. In the automotive market, electric delivery van startup Arrival is investing in micro-factories around the world for production near customer centers. During the pandemic, we saw another example of distributed manufacturing in action, as manufacturers shifted production lines to create emergency medical supplies and PPE, often turning to existing, local 3D printing lines to produce the equipment needed for medical care and protection.
With the increased automation that often comes alongside smart, distributed manufacturing technology, manufacturers also need to consider the continued importance of human expertise in their operations. While technology can decrease the need for human intervention, people will remain involved in the context of innovation where creativity, imagination and intuition are required. Automation and human intervention, which seem like two extreme ends of the spectrum, go hand in hand. Manufacturers need to create strategies for machine intelligence and human expertise to work together in a distributed environment to increase automation in manufacturing while freeing up time for skilled engineers to define and fine-tune production processes to fit their unique needs.
Another key consideration for manufacturers introducing distributed, cloud-based manufacturing is ownership and protection of proprietary data, such as prototypes and designs. As companies transition from centralized to distributed production, sharing data is essential to empower users across locations to improve designs and processes. However, it is important that manufacturers retain ownership and control over their data so that they can capture, use and apply data to create smarter production processes and maintain a competitive advantage.
While many of distributed manufacturing’s recent success stories have been the result of quick thinking in reaction to a short-term need, these solutions have sparked proactive conversations for the future of manufacturing. With lessons learned and new technologies in place, the future “Factory of the World” may be coming to a town near you, bringing with it a more reliable, sustainable and efficient supply chain.