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Wazp’s Shane Hassett examines the evolution of supply chains and how Covid-19 and smart manufacturing have shaped future trends.
Over the past 30 years, the globalisation of supply chains has become common, so common in fact that we pay little or no attention to where our products are produced. We probably even chose to ignore the “Made in…” label. The use of technology and the speed of delivery means it does not really matter where it is made.
Supply of goods has for a very long time been underpinned by an almost unshakable certainty that the products will be delivered. Any innovation in the supply chain was more focused on its impact on margin than any real shift in thinking or supply models.
Then, along came Covid-19. In statistical terms that was a real outlier. So much of an unprecedented event that logistic, manufacturing and buying professionals were well within their rights to assume it would not happen. But it did. Our unshakable belief in the robustness of our supplies evaporated and made space for us to look at how innovation can really impact and reshape the traditional supply models.
Here are some of the biggest trends impacting the future of manufacturing and supply.
Direct-to-consumer (D2C)
The redesign of supply models is based on data. The more a supply chain can interact with the consumer the better it understands how that person prefers to engage with their products. Liam Casey of PCH understands this better than most and, in a recent white paper, makes it clear that in order to meet or exceed the expectation of the customer we need real-time intelligent information.
D2C enables better, more sustainable products and reduces the need for over production. It allows brands to flip the sales cycle on its head – buy the product first, then make it. But in the age of Amazon and lightning-fast delivery times that requires real speed in manufacturing and supply.
Local manufacturing
To supply faster we need to produce closer to the time of need but also the location of need. In 2019, Nokia showcased its ‘factory In a box’ concept – “A disruptive project to provide modular and flexible production in a mobile, demand-centric way”.
The concept being that a factory could be so small, intelligent, and modular that it could be packed up a moved depending on where the demand is.
Locally manufactured parts also have a significant social and environmental impact. A local market producing for itself means jobs. Jobs in design and development, in manufacturing and post-processing and in fulfilment. It may even promote entrepreneurship due to access. Local manufacturing also means less waste, lower CO2 footprint and an ability to reuse material rather than dump.
Circular supply
A circular supply chain is one that is built around reusing its waste material and returns rather than allowing them to go to the landfill. It is about incorporating circularity at the design stage.
Accenture recently suggested that a circular supply chain creates brand differentiation with an immersive experience that empowers consumers and rewards the suppliers for their commitment to sustainability.
The consumer is a driving force that enables this shift but in reality, it is governments that decide what products do or do not go to landfills. This is done by incentivising recycling, penalising waste, and investing in innovation.
A quick look through the available grants at a national and European level tells you that circular economy is a key target area – the best ideas from reclamation, reuse and sustainable materials are being heavily funded.
Sustainable materials
Biomaterials are on the verge of a major breakthrough. Modern feedstocks that are ethically sourced, sustainably processed and capable of reuse or degrading without a trace. The critical factor holding some of these materials back is cost. New products are often expensive. It takes demand to drive the prices down.
With more consumers making conscious purchasing decisions about the source and makeup of their products it forces brands to differentiate themselves by providing a more environmentally aware product. This drives an environmental due diligence that extends beyond green energy tariffs to modern materials, circular waste management and smart manufacturing solutions.
Smart manufacturing
The use of AI in manufacturing is still in its early stage but automation, robotics and 3D printing are terms that have been thrown around the industry for some time. AI promises to improve decision-making, to increase efficiency, to reduce waste and potentially even design products based on consumer preferences. It also promises to make the most of the technology we have at hand.
Several organisations are practising smart manufacturing, which enables a smart supply chain. This will bring factories that are flexible enough to produce eyewear today and automotive components tomorrow.
Production lines that can assemble and fulfil orders can at the same time be working on decorative items in a completely different industry such as homeware. These smart factories are built on smart tools – tools that do not require massive change overs or involve huge set up costs. These factories will be able to respond to the demands of a market, will be environmentally conscious, local and driven by the consumer.
Shane Hassett is the co-founder and CEO of Wazp, an end-to-end supply chain for additive manufacturing headquartered in Tralee, Co Kerry.
