Replacing old technologies on a global scale often means a change in workflows and measurements. The key challenges are 1) how to bring all these different technologies together and 2) how to roll them out on the entire production environment. The most urgent question for most production companies is not how to implement the latest technology most have pilot projects and implementations for data analytics, digital manufacturing technologies or artificial intelligence. The more automated the factory becomes, the more flexibly it can react to market changes.Īutomation is complex, and there’s a lot of work to do to lay the foundation at any facility. These human decision points stand in the way of the complete “lights-out” factory, but not in the way of progress. But decisions still need to be made by people who are responsible for the outcome. For example, a manufacturing execution system (MES) for the coordination of production machinery can automate the task of machine maintenance scheduling. Increased automation makes locating facilities in high-cost but also highly educated countries a smart move. In addition, fully standardized, digital and automated processes can be much quicker than processes that involve human interaction and manual tasks. Factories operating out of high-cost manufacturing hotspots such as Germany and Japan are largely automated for production and deploy far fewer employees, relying mostly on skilled engineers to maintain the machinery and the equipment. Automation helps factories operate with far less unskilled (mainly human) resources. Automation makes it possibleĪutomation is enabling manufacturers to build new smart factories in developed countries. Reshoring and back-shoring is picking up steam as technology helps companies reduce labor costs via automation. Thankfully, the advancement of digitalization and automation, robotics, machine learning, and advances in manufacturing techniques have increased manufacturers’ ability to create smaller, more automated and much smarter factories located in countries and cities closer to the customer. Now, with shipping costs through the roof, and both containers and spots on ships hard to come by, companies are recognizing the benefit of reduced transport and moving manufacturing closer to customers - but that requires a rethink of how these factories operate. That made sense when global supply chains and just in time sourcing were efficient and cost effective. What does that mean? Since the 1980’s, the global manufacturing business model has been centered around locating physical factories in countries where labor costs were cheap. The need to reduce delays and transport costs, as well as the pursuit of more sustainable production have led organizations to adjust their manufacturing footprints. With the amount of disruption in the past two years, happening at an accelerating pace, the only constant now is change. In fact, supply chains expanded with goods being produced farther and farther from the customers who buy them.īut the pandemic, and several other factors, changed all that. They employed, and are still stuck with, a geographic footprint for production that was driven by labor arbitrage around the globe, rather than by factors such as proximity to customers or ecological considerations. Manufacturers placed their factories in less-developed countries with low labor costs. The impact is nowhere more robust than on the shop floor. The adoption of automation is one of the unexpected game-changers that the COVID-19 pandemic has accelerated in manufacturing.
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