The key to more flexible manufacturing

The rise of globalization over the 20^th century gave rise to the ability of companies to produce all their goods in a few central locations than ship them to consumers the world over. While this may seem like an overall positive for logistics and efficiency, it can also be a detriment in some cases, preventing companies from adapting quickly to shifting market conditions or even causing the majority cost of a product in some cases to be from storage and logistics.

While centralized mass production still has its place, for many consumer packaged goods, the next stage of their manufacturing may look very different. In a recent podcast, host Conor Peick was joined by Alastair Orchard, head of Digital Enterprise Thought Leadership for Siemens Digital Industries, to explore what a future of dynamic, adaptive manufacturing may look like.

Check out the full podcast here or keep reading for some of the highlights of that conversation.

The benefits of distributed manufacturing

Producing goods in a single, central location has its benefits but it is also susceptible to certain problems as well. When production is centralized, it also becomes inflexible and slow to adapt. While every #2 pencil or garden hose might need to be produced the same, many goods such as t-shirts or water bottles may require many variations that very based on region, time of year or even sudden, unforeseen events. When all goods are produced in a central location, it can make it difficult to adapt to different regional demands, especially if they appear and disappear quickly.

This is where the next evolution of manufacturing comes into play, where companies can quickly allocate local manufacturing capacity to produce in-demand goods for a particular market without the need for long supply chains or slow production line spin-ups. Alastair gives the example of, how during COVID, factories that were producing car parts shifted to making PPE to meet local demand. While this is a single example, expanded to a broader scale, this concept of allowing a single factory to produce many different products on demand helps cut carbon cost and complexity by making things were they’re actually needed.

Enabling this model requires a strong digital backbone as well. Compared to a centralized manufacturing approach, building various product variants at different locations requires a robust digital thread capable of adapting designs to available production and material resources, validating finished products for any errors and performing on the fly optimizations to ensure an ideal result regardless of any external factors.

Building a portable factory

Extending beyond producing goods in local factories, in certain cases, it may even make sense to bring the factory itself to the consumers. Alastair describes the concept of a portable factory; a highly digitally integrated production system employing advanced robotics and AI to, for example, manufacture bespoke medications, within the confines of a single shipping container. In this example the entire “factory” could be shipped to location where it could then be setup to produce in-demand goods automatically, allowing it to meet the exact demand of its local market with an agility centralized production can’t match.

This approach would also allow for a far greater degree of customization. Rather than a customer picking from a selection of premade products that are made available based on demand forecasts or waiting days or weeks for a custom order from a factory halfway around the world, a portable factory could produce exactly what a customer wants onsite and have it to them within a day.

Achieving these types of results does, once again, rely heavily on software, especially the ability to manage hundreds or thousands of unique product variants, as well as the bill of materials and recipes needed to produce them. While portable factories may largely seem like a hardware problem, in fact, a strong, integrated, software ecosystem is equally vital in achieving the right result under any circumstances.

As digitization continues to evolve, manufacturing will be poised to go through another revolution. While many products will continue to produced centrally and shipped worldwide, companies will now have another option as well, the ability to flexibly produce highly customized products right on the consumers doorstep, allowing them to better meet both customer expectations and unpredictability market conditions.

---

Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.