15 Sep, 2022 / BY Neil Sharp

Localisation and distributed manufacturing. Is the factory really coming home?

As raw materials and components have become stuck in global bottlenecks, disrupted by extreme weather, pestilence, politicing and war, we’ve seen how an over-reliance on fragile, international supply chains can come back to bite us. Could localisation and distributed manufacturing end this uncertainty by bringing factories and supply chains ‘home’ instead?

What is distributed manufacturing? 

Distributed manufacturing  is a form of localised production. It replaces a centralised model of overseas mega-factories producing goods at scale for global distribution. Instead, it envisages networks of regional micro-factories producing more customised goods on demand using robotics, and even local materials to fulfil local market needs.  In this model ‘smarter’, regional factories would replace global economies of scale with economies of scope.

Why the pressure to localise?

Increasingly risky webs of global dependence are driving companies to consider more radical localised alternatives.  The pressure on companies to reduce their carbon footprint and prevent exploitation of labour overseas is also driving the trend. Meanwhile, the possibility of more customisation,  and on-demand production enabled through robotics and addititive manufacturing is making such moves seem more commercially feasible.

Offshoring was once the power that was driving business growth - is the tide turning?

There’s no doubt that centralised, overseas manufacturing has changed the world. It’s made more products more affordable for more people. It’s allowed companies to outsource their production needs cheaply and concentrate more of their resource on R&D. It’s accelerated new product development and democratised access to life-changing technology across the world (think cars, washing machines, medical devices and more).  

However, there are signs that this approach has reached its limits.

Feeling the strain?

In the 'Age of Amazon 'customers are more and more expecting what they want, when they want.  Pressure is being exerted at the manufacturing level, with the market increasingly requiring customised products of high quality to be delivered at break neck speed.  The global supply chain shut down of the last couple of years, proved just how easily this expectation could be frustrated. 

In addition to this, in the last 20 years, the sheen has come off the overseas outsourcing model for many brands.  Unhappy with the quality of these solutions, the rising costs of transportation and the danger of IP theft, many businesses have been exploring other options.

Maybe, it's not surprising, then,  that 52% of companies are currently looking into localised production, according to HP’s Digital Manufacturing Trends Report

Will it come true?

So is a cloud-based network of centralised control powering regional manufacturing operations a model we can all look forward to it in the future?

In automotive, where robotic solutions are highly advanced  the possibility of entirely automated, regional micro-factories controlled by IoT are increasingly seeming like the answer to quality and customisation demands without the wait

As discussed in our recent blog on the micro-factory, with these robotic solutions:

“The AMRs are as close to human workers as the human brain, They use artificial intelligence to behave the same way as a human team would: They can move over the factory floor to gather the parts they need, shifting out of each other’s way in the process. They can join forces and help each other if they need to move a heavy part. And they can respond to changes in the plant, reducing the amount of energy they need to complete a task. All communication goes through the factory’s cloud.”

At the touch of a button, the robots can produce customised end products, and with the right  reconfiguration they could even build something entirely different.  Contrast this to human teams requiring different specialisms to deliver customised solutions and significant retraining to switch between product type.

Additive manufacturing produces components on demand

In other markets the advent of additive manufacturing has made for the intriguing possibility of complete products or parts being replaced on demand.  

Ocado have found they can build 50% of the parts they need for maintenance of their pick and pack robots with additive manufacturing.

Never mind micro-factories, these facilities can be located in the warehouses where they are needed, improving the speed of fixes and cutting down on carbon footprint as replacement parts shuttle between campuses.

Elsewhere, though, the applications additive manufacturing is promising  for the electronics industry might seem somewhat niche:

"Researchers at ETH Zurich have used 3D printing to build an autonomous cat-like robot that’s capable of imitating the movements of real-life felines." 

Still, such research projects are suggesting what may be possible in the future.

Reshoring is not always a success

However, attempts at reshoring have not always been successful.  Although not an electronics manufacturing company, Adidas’s Speedfactory solution was rapidly closed down when it found automation in its European factories would be too complex and expensive to produce the amount and range of goods at a price the market would bear.  Production went swiftly back to Asia without a fanfare.

Reshoring brings with it unique challenges 

The dream of truly distributed manufacturing is to rework supply chains so everything can be fulfilled locally.   As the UN sustainable consumption report remarks:

“small-scale, flexible networks will have a more local dimension, utilizing local materials and other resources, thereby offering environmental benefits and leading to more sustainable forms of production, i.e., energy efficient and resource-saving manufacturing system”

But is it feasible to imagine all our raw material needs could be fulfilled locally?  After all, our reliance on rare metals depends on global supply channels to answer their needs. 

Raw materials are finite

In many cases  resources we currently depend on to build our products are finitite and in the medium to long term, we need to change our expectations and business models to address this.  As the Royal Society of Chemists points out:

“The reserves of some rare earth minerals used in electronics, medical equipment and renewable energy could run out in less than 100 years.”=

Recycling and repair

Faced with these realities,  e-waste recycling should be urgently exploited  with regional centres extracting and reusing valuable elements that are currently ending in landfill. 

Distributed manufacturing could also support entirely different business models, focusing on rebuilding with recycled materials or servicing products that are leased in more radical tech subscription models

The industry must change

One thing is for sure, with global supplies of electronics raw materials dwindling and piles of e-waste growing,  the industry has to change models of production and consumption for a sustainable future.

But there's no reason why this change shouldn't happen.  As the thinker John Paul Gatto pointed out:

“mass-production economics have successfully altered public taste to believe it doesn’t make sense to repair something old when for the same price you can have something new.”

With a new distributed manufacturing ecosystem, supported by more innovative commercial thinking, the factory may not only 'come home' but have a whole new reason for being.

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