In an Asian country, six people were recently sentenced to prison after they had been involved in a failed assassination attempt. This is good news for now, but you may be wondering what she is doing in this blog post about the supposed end of offshoring in the manufacturing industry. Well, let us surprise you!
Fake it till you make it or end up in jail
A contract killer received about half a million dollars from a business owner to eliminate a rival. The killer did what any good businessman would do: he decided to pass the job on to a “colleague” and kept half the money for himself. This happened several more times. The corresponding payment naturally decreased with each new subcontractor step. For the last contractor in this murderously creative chain of murderous offshoring, the remaining almost $20,000 was too little to get his hands dirty. Instead, he decided to contact the victim to convince her to fake her own death. When this alerted the authorities and the whole plan was discovered, the arrests were made quite quickly.
Who wants good results, has to do the work themselves?
This shows once again that nowadays you can’t trust anyone to do their job properly – some of you will think now. Whether for such delicate jobs as those mentioned above or for work in production, the times of outsourcing skills and manpower abroad are coming to an end. Perhaps this is why there are signs of a reversal of the trend, which is hidden behind terms such as reshoring or repatriation. But what is this all about and what other trends will influence the manufacturing industry in the near future?
Is process automation the beginning of the End of offshoring?
The manufacturing industry was among the earliest adopters of automation processes, whether through the use of machines and robots to assemble, test or package products. Likewise, manufacturing was a pioneer in offshoring and outsourcing. Recently, however, it has become increasingly difficult to reap the rewards of this commitment. Many manufacturers are no longer satisfied, primarily due to outdated supply chains and accounting systems. Digitization and automation offer new cost-saving opportunities for manufacturing companies just in time. More and more tasks can be completed through digital, automated processes. As a result, wage shares in manufacturing costs are falling. International companies with global locations are therefore well advised to consider realignment with a view to reshoring production sites. The manufacturing companies of the future will become smaller and more agile anyway, as the next trend shows.
Learning from thebig players –short distances mean big profits
You can think what you want about Amazon, but the success of the online giant is undeniable. One of the secrets of this success is the constant optimization of supply chains. This is also a sensitive area for manufacturing companies. But there are other parallels. Where low transport costs and cheap salaries used to encourage the construction of mega-factories abroad, everything is now moving in the opposite direction, both for the world’s largest retailer and for the manufacturing industry. Supply chains are becoming shorter, production facilities are becoming smaller and the proportion of human labour involved in manufacturing and distributing products is decreasing. This does not mean closing all foreign operations and laying off half the workforce. However, it would not hurt to take a hypothetical look at the concept of the micro-factory and to develop concepts of how such a change could look like for your own company in the medium term. But it is not only the companies of the future that will become micro, but also the demands of the customers. This sounds more positive now than it probably is in reality.
From mass production to personalised production
The manufacturing industry has evolved much further since the famous saying of the pioneer of mass production, Henry Ford, who once claimed that a customer can have a car painted in any color as long as it is black. Today’s customer expects increasingly customizable options on a wide range of products anyway. Companies that respond to customer feedback and special requests will be successful. In manufacturing, this may well mean that batch sizes are drastically reduced or that individual products have to be made more often. This trend is likely to continue as technologies such as 3D printing and laser-based manufacturing become more common in the industrial sector and the market continues to shift in a customer-oriented direction.
To help shape progress or to let yourself be shaped by it?
It may take several years before the changes just mentioned are completed. But that they are coming is relatively undeniable. Intelligent machines have come to stay and companies that continue to rely exclusively on outdated models and concepts such as offshoring or mass production for fear of the risks and challenges associated with the early introduction of these systems do so at their own risk. It makes sense to plan now for how you can adopt new technologies and adapt businesses to trends so that they maximize their potential to remain competitive. MySolutions is happy to help you meet the trends and developments in the manufacturing industry with tailor-made software for manufacturing companies and looks forward to hearing from you. Facebook Twitter