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Technology, customization shift global manufacturing: study

Manufacturers consider proximity to their customers vital as technology drives an industry shift.


BERLIN — The emergence and adoption of new technologies are now the driving forces in global manufacturing, leading to businesses to focus on proximity to customers and the need for increasingly flexible supply chains, according to research launched at The CoreNet Global EMEA Summit in Berlin.

As technological innovations like 3D printing, collaborative robots and big-data drive the era of mass customization, 82% of manufacturers now consider proximity to the end-customer as vital to their business model.

According to the report, Getting Closer to Customers, this is leading to more diverse business locations and increasingly flexible supply chains to enable manufacturers to service their consumers better and faster, and add the required level of flexibility and efficiency to their manufacturing processes.

Seventy-seven per cent of manufacturers believe flexibility of the supply chain is the main challenge posed by mass customization.

As these technologies are increasingly adopted, they may also reduce the levels of storage and production space required by businesses, as growing automation and more flexible, less invasive robots impact the design and configuration of production and warehousing spaces.

“Technology is re-defining manufacturers’ supply chains and real estate criteria by reducing space requirements and providing opportunities to reduce the labour cost per unit,” said Guy Douetil, managing director of EMEA corporate solutions at Colliers International. “Consumer demand for speedy delivery of customized products, coupled with the rising labour costs in markets typically associated with mass production, has the potential to alter the global balance of power in manufacturing.”

The report suggests the effects of these shifts are already visible in the supply chain. A significant 62% of manufacturing companies consider robots important in their production process, with 64% looking to increase automation in the next three years.

Of those manufacturers that repatriated in 2013, 83% identified proximity to their consumers as a top three factor affecting their decision to re-shore.

“We expect more businesses to assume a ‘best-shoring’ approach to their supply chains, resulting in less demand for manufacturing facilities in foreign markets, the demand for space in local markets will be offset by the space-saving benefits provided by technological advances,” said Douetil. “As more automated manufacturing processes are adopted, fit-out requirements will become more rudimentary as companies make cost savings by reducing heating and lighting facilities in areas where processes are undertaken by robotics.”

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