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Innovating In Times Of Crisis

Innovating In Times Of Crisis

In an interview with APMEN, Laurent Blaevoet, Asia Managing Director of Novacel discusses the challenges the company faced due to the pandemic and how it innovates sustainably. 

Laurent Blaevoet

Novacel is a French company, part of Chargeurs Group, with more than 40 years of experience in the field of temporary protection of industrial surfaces, technical tapes, performance coatings and specialties machinery. Novacel is a supplier of industrial solutions in various industries (Windows, Glass, Plastics, Metals, Decorative laminates) with a strong focus in metal industries in Asia. Here, Asia Pacific Metalworking Equipment News (APMEN) spoke to Laurent Blaevoet, Asia Managing Director of Novacel to understand how the company was impacted by the pandemic and how it innovates sustainably. 

Q: What was the impact of Covid-19 for your company in Asia and your customers?

Laurent Blaevoet (LB): The pandemic has disrupted a global balanced supply chain and an economic system, which are complex and fragile. 

Our presence in different countries allowed us to deal with the Covid-19 complications using different approaches. Asia was in the front line of the pandemic; it allows us to appreciate how different countries recovered from the disruption due to the pandemic and reopened their economies.

The negative impact of the Covid-19 on our sales was very strong, in the first quarter 2020, especially in China. Most of our customers reduced theirs orders because their production lines were shut down. However, they resumed their activities equally abruptly, in April-May 2020 in order to offset the major effects in the supply chain and in the stocks pipeline. Consequently, we dealt with a strong recovery in China firstly and then to other countries.

We faced various difficulties in finding shipping, both for domestic transportation and for international shipping as most of our products are produced in Europe. Raw material supply was also a concern because the production capacities are limited and not adapted for excessive pent-up demand. This has caused an explosion of prices on most of the raw materials such as plastic resins, chemicals and natural materials for adhesives.

Q: How has Novacel adapted during this crisis?

LB: Novacel is a human-centric company, which facilitates the response to such crisis. 

Novacel was prompt to set up sanitary and contagion prevention protocols at its different locations: temperature measurement, wearing a mask, installation of terminals with hydro-alcoholic gels—measures that are today widely recommended, were implemented in Novacel as early as February 2020. 

In Europe, not only did we set up these health protocols in our factories, but also we dedicated part of our industrial production capacities to develop sanitary products for protection like hydro-alcoholic gels, antibacterial films and disinfection tunnel. More recently, Novacel even developed an anti-microbial and anti-covid spray that can last of three months on every surface, reducing the risk of contamination by contact. In France administrative authorities designated Novacel as an essential industrial activity, which permitted us to remain productive, even during the various containment plan enforced by the Government.

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The Global Supply Chain Crisis—Could We Have Seen This Coming?

The Global Supply Chain Crisis—Could We Have Seen This Coming?

In the world of supply chain, we can never be too sure of what will happen next. APMEN interviewed Oliver Stein, Director at South East Asia, JAGGAER to understand how the pandemic has disrupted manufacturing supply chains and how we can mitigate the risks.  

Could we have seen the global supply chain crisis coming?

Oliver Stein (OS): In the world of supply chain, we can never be too sure of what will happen next. Take the recent Suez Canal incident – who could have foreseen a 200,000-tonne ship getting stuck in the world’s busiest shipping route?

That said, it would not be wholly untrue to say that decades of taking back-office functions for granted may have contributed to the current supply chain crisis. Pre-pandemic, we saw many organisations giving far too little importance to their supply chain operations – whether this was ensuring they have the right channels and suppliers in place or digitising their back-office functions so they can rely on predictive technology tools to ensure business resiliency. 

Despite the many uncertainties, the global supply chain industry can be reasonably predictable if we know where to look and manoeuvre accordingly. Unexpected events cannot be controlled, but better preparedness can make a world of difference when it comes to staying resilient amidst disruptions. 

How has the pandemic disrupted APAC’s manufacturing industry supply chains?

OS: Every sector was affected in some way by the COVID-19 crisis. For the manufacturing industry, without a doubt, the pandemic caused increased uncertainty and disruption. Manufacturing, arguably, touches more transition points than any other supply chain. Travel restrictions and quarantines heavily impacted logistics capabilities for all nodes in the supply network and brought to light the challenges of having limited network diversity. 

The consequences of having restricted cargo logistics, particularly in air, road and rail were certainly felt across the APAC manufacturing sector, especially in the first half of last year. While cargo movements and supply chain operations slowed down, we saw the demand for products and services going up and up. Customers were reliant on products being delivered to their door with safe distancing measures and manufacturers needed to be able to meet this demand. 

Take the example of an electronics manufacturer, here in SEA. They were impacted at multiple points of their supply chain causing an almost complete halt to their delivery capabilities. The initial disruption started in their ability to source required raw materials. With a large portion of their supplier base suddenly struck down due to COVID and running at limited capacity, sourcing of their key direct goods caused their operations to nearly come to a standstill. Then, even at lower capacity, quarantine rules locked down almost all their manufacturing plants, decimating their production line. To top it all off, their main logistics paths for delivery were ocean freight based and they ended up having multiple containers stuck offshore in Singapore and elsewhere due to docking and delivery restrictions caused by responses to the pandemic. This was the worst-case scenario in terms of pandemic impact – all aspects, from sourcing to delivery, were brought to a grinding halt.

What are the lessons learnt and how can we rethink our strategies?

OS: Limited network diversity makes organisations significantly more vulnerable to disruptions – this was a lesson many organisations learnt the hard way over the past few months. 

Before the pandemic, many businesses were reliant on a single country supplier base or single shipment routes for their supply chain operations. The current supply chain crisis has highlighted the importance of building out a supply base that can respond swiftly to changes. More and more, organisations are now understanding the importance of determining the supplies that are critical to business and ensuring they have a diversified supplier base they can rely upon.

Sourcing and supplier trends are changing, with focus now on far more than just price. Companies should look beyond the cheapest option when procuring items, and instead consider other crucial risk factors such as geographical limitations, ability to deliver, and sustainability. Smart procurement is already possible with today’s technology. Automation, predictive technologies, advanced analytics and streamlined workflows can all aid organisations in allocating budget more effectively and focusing on areas that will provide sustainability and resilience to their supply chains.

What can manufacturers do now to thrive despite the ongoing disruptions?

OS: Understanding the risks associated with each supplier is a key first step. Categorising them in different tiers of risk or segmenting them in terms of importance to the organisation can help in mapping the overall supply chain network. It gives manufacturers a macro view of the potential gaps that could arise from any unexpected event. However, risk assessments and regular check-ins with suppliers can be a time-consuming undertaking. Thankfully, there are many solutions available today that can help automate these regular check-ins, freeing up valuable employee time to focus on more meaningful, strategic work. 

Ultimately, ensuring businesses are not caught out by similar disruptions in the future requires a shift in mentality and consideration of a move from “just-in-time” to “just-in-case” manufacturing methods. Manufacturers must adopt predictive modelling technologies to get a clearer view of their supply chains. Being aware of potential disruptions and hurdles ahead of time will be key to boosting business resilience. When supply chains are responsive to business conditions, the benefits can reach far beyond limiting risk exposure.

How can we build a more resilient supply chain for the future?

OS: Organisations can start by taking a step back and reanalysing their current supply chain functions. Key areas to consider would be base location diversity and supplier networks. Take this time to identify all the potential gaps and possible solutions to mitigate any risks. 

Building a supply base that can respond to shifting conditions is crucial. With the visibility gained from identifying potential risks and opportunities to strengthen supplier performance, the next step is to look to design strategies and build relationships that drive positive outcomes. Some of these include:

  • Managing by category: Not all categories are equally important. Know which ones are critical to your business and manage them strategically.
  • Diversifying the supply base: Many organisations have learnt the importance of this the hard way in recent times. Expanding the list of qualified suppliers is one of the most fool-proof ways to build a resilient supply chain. 
  • Engaging for the long term: Squeezing suppliers to drive down costs is a short-term strategy with limited pay-off. Take the time to build a partnership that benefits both organisations and when challenges arise, the relationship will pay off. 

Thankfully, there are many solutions and platforms out there that can help organisations adopt a smarter, more efficient approach to supply chain management. Picking solutions that are not one-size-fits-all but instead flexible enough to support your unique business needs and challenges will be key.

 

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Suez Canal Blockage Highlights Supply Chain Vulnerabilities

Suez Canal Blockage Highlights Supply Chain Vulnerabilities

In the latest supply chain crisis, a 400-meter-long mega-container vessel has wedged itself diagonally across the banks of Suez Canal since Tuesday, 23 March and has caused a blockage along this narrow channel.

The Suez Canal is the fastest shipping route from Asia to Europe and about 13 percent of world trade passes through the canal, according to Allianz, an investment firm. More than 50 ships pass through the canal every day, carrying 1.2 billion tons of cargo, including goods from crude oil to cattle. Hundreds of vessels remain trapped in the canal and some have opted for an alternative, much longer route around the Cape of Good Hope—the southern tip of the African Continent.

The blockage is holding up an estimated $9.6 billion worth of cargo each day, according to Lloyd’s List and causing a strain on global supply chains. Singapore’s Transport Minister has commented that the blockage could temporarily disrupt supplies to the region and drawdown on existing inventories will be necessary. Europe’s manufacturing industry including the auto sector will be one of the hardest hits as they operate in “just-in-time” supply chains where components are sourced from Asia and not stockpiled.

The incident has also emphasised vulnerabilities of our supply chain and the need for visibility in the entire supply chain to ensure transparency and agility in the event of an unexpected disruption.

*Update: Efforts to dislodge the giant vessel and restore traffic were finally successful a week after the incident and a backlog of 422 ships have the be cleared.

 

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Three Ways Additive Manufacturing Defined 2020

Three Ways Additive Manufacturing Defined 2020

While additive manufacturing has been trending toward mass adoption for some time, the global pandemic has accelerated this momentum. Here are three ways how metal 3D printing has defined manufacturing this year. Article by Richard Elving, Markforged.

While 3D printing has been around since the 1980s, advancements in technology and the unprecedented supply chain disruption due to COVID-19 have driven more mainstream adoption throughout 2020.  While the pandemic has wreaked havoc on global business, causing shutdowns and spikes in demand, we’ve also heard positive stories of true innovation from businesses across the manufacturing sector.

Markforged’s inaugural annual COVID-19 Impact on Supply Chains: Global Additive Manufacturing Industry Report found that modern manufacturers—or, those who adopt digital manufacturing solutions such as 3D printing—were the most resilient during the pandemic, reporting that they’ve been operating “business as usual,” while other manufacturers scaled production back. 

Based on research conducted with our global customer base and the wider industry, the report notes that almost one quarter (24 percent) of our customer respondents said they had begun producing new products during the pandemic, and 45 percent stated that “nothing has changed, it’s business as usual.” With 28 percent of customer respondents noting that they are now using 3D printing more compared to pre-pandemic usage, it’s clear that 2020 has been a year that we will look back upon as an inflection point for additive technologies. 

While additive manufacturing has been trending toward mass adoption for some time, the global pandemic has accelerated this momentum. Here are three ways we’ve seen metal 3D printing define manufacturing this year.

  1. Identifying Solutions to Supply Chain Delays

In March and April of 2020, we saw supply chains across the globe break. Whether it was from unpredictable supply and demand patterns, unreliable suppliers or broken line parts that could not be traditionally replaced, the manufacturing industry was devastated. As international supply chains continue to strain while we continually battle the virus, manufacturers want more control over their supply chains. 

But, by turning to the flexible solutions offered by 3D printing, manufacturers were able to rapidly engineer robust solutions and simplify their logistics. By leveraging printers to solve their supply chain problems, manufacturers were able to remain resilient in the face of unprecedented difficulties.

One of Markforged’s customers, an orthopaedics business, was one organisation that was able to streamline its manufacturing processes with the help of an industrial 3D printer. Extended waiting times for a specific medical grade raw material casting forced this business to explore all of the options available to them–including the printer they were already using to print tooling jigs and fixtures. They printed a duplicate of the raw cast part they were waiting for and were able to perform full test runs of their manufacturing process. 

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Frost & Sullivan Reveals 9 Emerging Trends Reshaping Industries Post COVID-19

Frost & Sullivan Reveals 9 Emerging Trends Reshaping Industries Post COVID-19

Frost & Sullivan’s recent analysis, The Reshaping of Industries Caused by COVID-19, encompasses nine key trends that will emerge from industries reshaping as a response to COVID-19. With the pandemic’s negative impact on the global economy, immediate action is critical. Technology leaders must assess the emerging opportunities resulting from COVID-19 and provide technological innovations to build company, society, and consumer resilience.

“From transformative MegaTrends to geopolitical chaos, there are several factors making it increasingly difficult to grow,” said Murali Krishnan, Visionary Innovation Group Senior Industry Analyst at Frost & Sullivan. “In the near term, companies should focus on diversifying supply chains and leveraging new opportunities arising from changing customer demands. In the long term, it is important to internally adapt to new technologies that support workplace and operational continuity to have a smoother transformation during recovery.”

Chaitanya Habib, Visionary Innovation Group Research Analystadded: “The shift in focus on cost optimisation and on avoiding further production losses post-COVID-19 has accelerated the adoption of automation and industrial robots across various industries. As a result, the global industrial robotics market is expected to grow from $44.6 billion in 2020 to $73 billion in the next five years, with increasing FDA approval and patent activity.”

The nine key trends across industries that will emerge as a result of COVID-19 are:

  1. Connected Living:The increased adoption of contactless surfaces post-pandemic will power the home automation and security markets. Systems encompassing voice activation technology will become increasingly popular among consumers.
  2. Connected Work: Reformed connected work scenarios will accentuate the need for “cloud everything.” New subscription-based models will witness a growing demand for Unified Communications as a Service (UCaaS).
  3. Digital Health: Digital health driven by telemedicine and robotic care will become the new standard of care delivery. Standardisation of service across the care continuum will require more service and technology providers.
  4. Geopolitical Balance: Countries should work together to keep trade flowing and ensure the supply of essential products, sending a signal of confidence to the global economy.
  5. Human Augmentation: The behavioral analytics market is expected to reach $3 billion in revenue in 2030, up from $230 million in 2019. Post-COVID-19, behavioral data will be used to enhance healthcare systems, financial services, and cybersecurity.
  6. Lights-out Operations: Autonomous “lights-out” operations will propel the demand for remote asset management solutions, and service providers will focus on data management strategies and data-driven business models.
  7. Smart Cities: Smart cities will create significant business opportunities with a market value of $2.46 trillion by 2025. Smart cities will prioritise more digitalised services and a strong data analytics infrastructure, leading to increased spending on technology.
  8. Supply Chain Optimisation: The supply chain industry is creating radical innovations with augmented reality, virtual reality, advanced robotics, real-time inventory tracking, and exploring how 3D printing could completely disrupt the supply chain in the next 10 years.
  9. Technology Advancements: Pandemic preparedness will speed up the deployment of artificial intelligence (AI) solutions and accelerate AI innovation. Beyond specific disease management, post-pandemic economies also will rely on AI and machine learning (ML) tools to expedite digital transformation across key business initiatives.

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Why Today’s Supply Chains Are Mission-Critical

Why Today’s Supply Chains Are Mission-Critical

Starting in production, to warehousing up to the delivery process, businesses are increasingly aware of the challenges lying ahead in terms of their supply chains. Poul Lorentzen of Körber Supply Chain talks about the findings of their recent survey.

As we’ve watched retail stores struggle to keep essentials such as paper towels and toilet paper in stock during the COVID-19 pandemic, we’re getting a stark reminder of just how essential well-oiled supply chains are for our economy. But while the supply chain’s importance is more pronounced these days, greater demand and surprise peak seasons have become more common in recent years. Customers require products faster, and they want a greater variety of options. In fact, according to Körber’s global survey “What Supply Chain Complexity Looks Like in 2020”, 73 percent of industry professionals agree that their senior executives see supply chains as mission critical.

Today’s supply chains are increasingly complex. Some sources of this complexity are familiar: handling more products; partnering with more suppliers; fulfilling through more channels; and meeting customer expectations. Then there are unexpected disruptions challenging supply chains across the globe and changing how we think about crisis mitigation and risk avoidance.

These complexities exist regardless of region, industry, or business size, according to Körber’s survey of more than 600 global supply chain executives held from February to May 2020. Nonetheless, businesses need to serve their customers under these circumstances—making supply chain management mission-critical to the majority of organizations moving goods. There are many moving pieces to consider, and some organizations have more resiliency than others. This includes technology, system flexibility, agile connectivity and integrations to a growing number of solutions, and transparency up to the last mile.

The metalworking industry is no exception. Starting in production, to warehousing up to the delivery process, businesses are increasingly aware of the challenges lying ahead. Körber’s survey revealed that the supply chain is getting more complex for almost everyone, but not at the same rate. Complexity presents itself differently across businesses. The most frequently cited challenges by the manufacturing industry is meeting customer expectations, according to 65 percent.

Reducing Supply Chain Disruption and Risk

So how do we keep our heads above water when complexities arise? How do we stay ahead of the ever-changing nature of supply chain? To reduce supply disruption and risk, consider the following: 

Adaptability: A flexible technology platform is key. The ability to make changes quickly can make all the difference, especially when the unexpected becomes a reality. Voice and autonomous mobile robotics (AMR), for example, can provide solutions for scaling to quickly adapt to arising needs. But, you need infrastructure built for pivoting to add these systems without disrupting operations and further complicating difficult situations. On the software side of things, cloud infrastructures provide the system scalability and managed services that offer vital resources when they’re needed most.

Efficiency: Many warehouses struggle with labour challenges, be it shortages during peak periods or unexpected occurrences like COIVID-19. As labour shortages persist, warehouse automation is on the rise. In fact, 49 percent of supply chain professionals report that they will add automation within the next five years. Supply chains need to be prepared to do more with fewer hands. Automated high bay warehouses, besides achieving a higher storage density, will also reduce the dependency on manual labour as compared to a conventional warehouse. By integrating these systems into the WMS and other critical logistics systems, automation can be a long-term solution whether you’re an SME or a large, global organization. 

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A Look At Global Powertrain Key Technologies And Trends By Region

A Look At Global Powertrain Key Technologies And Trends by Region

Frost & Sullivan’s recent analysis, Global Powertrain Outlook, 2020, finds that global automotive sales are expected to decline by more than 14.2 percent due to COVID-19 by the end of 2020 as manufacturing facilities and supply chains are affected by worldwide lockdowns. However, this slowdown is not expected to have an impact on consumer purchase trends. Demand for diesel engines is expected to decline in Europe by 30 percent by the end of 2020 as Worldwide Harmonised Light Vehicles Test Procedure (WLPT) commences, while global electric vehicle (EV) sales are forecast to increase by about 3.4 percent, spurring demand for gasoline-hybrid and fully-electric powertrains

“OEMs will focus on hybridising existing internal combustion engine (ICE) vehicles as full hybrids have proven to help comply with stricter regulations and have also enjoyed consumer success in recent times,” said Naga Karthik Voruganti, Research Analyst, Automotive & Transportation at Frost & Sullivan.

“Engine downsizing will continue, while the highly efficient gasoline direct injection (GDI) engines will continue seeing an increase in adoption. The integration of gasoline particulate filters (GPFs) and three-way catalytic converters (3WCs) is expected to increase substantially in 2020 with more OEMs seeking to get their gasoline-powered vehicles certified under the new WLTP regulations.”

Voruganti also said mild-hybrid powertrains and the standardisation of exhaust after-treatment technologies, such as selective catalytic reduction (SCR) and coated GPF, are major technology trends that could impact the powertrain industry in 2020.

The growth opportunities in the key regional markets will vary considerably. The main trends and growth opportunities in each key region are presented below:

  • The United States: The US is expected to register about 1.13 million electric and hybrid vehicle sales in 2020, an increase of about 4.7 percent, with a majority of the growth coming from Battery Electric Vehicles (BEVs) and mild and full hybrids.
  • Europe: European Electric Vehicles of all types (xEV) sales are expected to grow by 5.3 percent, assuming a moderate COVID-19 impact, and EVs alone will have a positive growth of about 27.5 percent.
  • China: Vehicle sales are projected to decrease in 2020 due to the unpredictable impact of COVID-19, but EV share is expected to increase from 4.9% of the sales in 2019 to 5.6% in 2020.
  • India: Hybrid vehicle sales increased by 75 percent from 2018, which poses opportunities for OEMs to explore the market. Diesel vehicles will witness an increase in prices compared to gasoline due to the stringent norms of Bharath Stage – 6 (BS-VI).
  • South Korea: Despite a decline of 1.6 percent in recorded sales nation-wide and the end of the temporary tax cut in August, the Mild Hybrid Electric Vehicle (MHEV) 48V segment enjoyed 283% growth, as sales quadrupled in 2019.
  • Indonesia: Car sales improved toward the end of 2019, but due to the sudden and massive impact of COVID-19 on the global supply chain, overall sales are expected to decline by about 17.3 percent in 2020.
  • Japan: Although the sales of new passenger cars in the country in 2019 declined by 2.1 percent from 2018, Japanese brands’ sales have increased by 1.9 percent; sales of foreign brands declined by 3.3 percent. Vehicle sharing and the fading appeal of cars among the younger population are trends expected to affect the domestic market in 2020.

 

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APMEN SURVEY: COVID-19 Impact On Manufacturing Industry

APMEN SURVEY: COVID-19 Impact On Manufacturing Industry

The COVID-19 pandemic has been having an unprecedented impact on the global manufacturing supply chain. For instance, factory shutdowns have drastically impacted the metalworking supply chain around the car and auto parts manufacturing industries.

In line with our continuing coverage of the impact of COVID-19, Asia Pacific Metalworking Equipment News (APMEN) recently conducted a survey regarding the impact of the COVID-19 pandemic to the manufacturing industry, including automotive and auto parts, aerospace and aerospace parts, electronics/electrical equipment, die and mould, machine tool, and medical device/equipment sectors.

Key questions include the challenges they experienced as a result of the pandemic; expected impact on their 2020 sales compared to last year; the most likely impact on their supply chains in the next six months; and whether they are expecting a pent up demand after the pandemic.

Here are some key findings:

  • 71 percent of respondents saw a decrease in demand for their products because of the lockdowns in every market worldwide.
  • Perhaps because of the drop in demand, majority or 47 percent of the respondents expect pent-up demand after the pandemic.
  • 55 percent of manufacturers surveyed, expect a decrease of more than 10 percent in sales this year
  • In line with that, 21 percent are saying they will diversify their supply chains by working with more suppliers, and 16 percent say they will shift to a localized supply chain.

For the full survey results, keep a look out for APMEN’s upcoming Jul/Aug issue!

Staying Connected

During a crisis, a spotlight is placed on the importance of the connection between a brand and its clients. In fact, 40 percent of our respondents say staying connected with their customers are among the key challenges they’ve experienced during the pandemic.

Your clients might be panicking, but it is important to provide them with anchors from your business to act as a focal point, like a beacon of light in a dark time.

It is key to establish such a light source through various human touchpoints. You should remind them of your shared experiences and the results that were delivered—and one way to do so is through targeted branding exercises for your business. Branding opens doors and creates new avenues for clients to reach out to you while seeing the value in doing business with you.

We at Asia Pacific Metalworking Equipment News (APMEN) would be very happy to help you on this front. Reach out to us and find out more about our solutions!

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The China Exodus: Survey Shows Sourcing, Manufacturing Moving Out

The China Exodus: Survey Shows Sourcing, Manufacturing Moving Out

A Gartner Inc. survey of 260 global supply chain leaders in February and March 2020 found that 33 percent had moved sourcing and manufacturing activities out of China or plan to do so in the next two to three years. Survey results show that the COVID-19 pandemic is only one of several disruptions that have put global supply chains under pressure.

“Global supply chains were being disrupted long before COVID-19 emerged,” said Kamala Raman, senior director analyst with the Gartner Supply Chain Practice. “Already in 2018 and 2019, the U.S.-China trade war made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks. As a result, a new focus on network resilience and the idea of more regional manufacturing emerged. But this kind of change comes with a price tag.”

READ: Impact of COVID-19 On The Automotive Manufacturing Supply Chain

READ: Coronavirus Outbreak Reveals the Weakest Links In The Supply Chain

Tariff Costs are the Primary Reason to Move Supply Chains

For decades, China has been the go-to destination for high-quality, low-cost manufacturing, and it has established itself as a key source of supply for almost all major industries including retail and pharmaceutical. However, Gartner research showed that the margin between those companies planning to add jobs in China versus taking them away narrowed sharply in 2019. The primary reason is the increase in tariff costs.

“We have found that tariffs imposed by the U.S. and Chinese governments during the past years have increased supply chain costs by up to 10 percent for more than 40 percent of organizations. For just over one-quarter of respondents, the impact has been even higher,” Raman said. “Popular alternative locations are Vietnam, India, and Mexico.

The second main reason for moving sourcing and manufacturing out of China is that supply chain leaders want to make their networks more resilient.”

READ: Trade War Pushes Apple’s Manufacturing From China To Vietnam

READ: Taiwanese Companies Shift Production To Taoyuan As Trade War Heats Up

Balancing Efficiency and Resilience

Only 21 percent of survey respondents believe that they have a highly resilient network today—meaning that they have good visibility and the agility to shift sourcing, manufacturing and distribution activities around quickly. However, 55 percent expect to have a highly resilient network in the next two to three years—a reaction to disruptions such as Brexit, the trade war and COVID-19.

However, resilience has a price. Fifty-eight percent of respondents agree that more resilience also results in additional structural costs to the network.

“We are at a crossroads in the evaluation of global supply chains that pits just-in-time systems designed to improve operational efficiency against just-in-case plans that emphasize planning and preparing for a range of plausible scenarios,” Raman added. “To find balance, supply chain leaders must engage in risk management to assess their organization’s willingness to take risk onboard and decide how to quantify that risk against other network objectives such as cost effectiveness.”

Moving Closer to the Customer

One-quarter of survey respondents stated that they have already regionalised or localised manufacturing to be closer to demand. Despite the cost of adding more players to the ecosystem and increasing the overall network complexity, regional supply chains can ease delays and shortages in times of disruption—if the model is economically viable.

“Many Western organizations will have to explore new forms of automation on the factory floor to decrease the costs of near- or onshore production. Some also favour a partial option, such as manufacturing in Asia and moving only the final assembly closer to the customer,” Raman concluded.

 

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MACH 2021 Leading The Way To Recovery

MACH 2021 Leading The Way To Recovery

January 2021 is going to be a hugely important landmark for UK manufacturers. After the disruption of 2020 getting supply chains moving and investment flowing are going to be big priorities for the new year. The place to do that will be the NEC, which will not only play host to MACH, the UK’s national engineering and manufacturing exhibition between 25-28th January, but will also be packed with other events.

After a gap of nearly a decade, Subcon will return to being co-located with MACH alongside a number of other shows, including Drives & Controls, meaning it will be a huge week for UK manufacturing.

The organisers have partnered on the events before, but in the current climate the collaboration takes on added significance as the need to kickstart the manufacturing sector after the impact of the Covid-19 pandemic becomes of crucial importance to the wellbeing of the UK economy as a whole.

By pooling their resources, expertise and experience, the two organisations said they would be better able to support UK manufacturing and engineering businesses to bounce back as the economy starts to rebuild and adapt to this ‘new normal’.

The highpoint of the week will be the Manufacturing Technologies Association’s Annual Dinner which the Association, which owns and runs MACH, will be holding onsite at the Vox, on Tuesday 26th January.

James Selka, CEO of the MTA, said: “Our intention is to ensure MACH is not just a showcase for the manufacturing technologies sector, but a celebration of the manufacturing industry at its best. MACH is a content-led event and brings together the latest advanced engineering and manufacturing technologies – in operation and all under one roof.”

“Highlights for the show will include a significant focus on the digital factory, with more automation and connected manufacturing processes, power by the hour and new cost efficiency solutions that will dramatically improve production processes and help shape the industry over the next decade.

“MACH has always been the place to see real innovation come to life. Manufacturers and engineers come out in force to support the UK’s national show and see first-hand how technology is developing. As such, MACH will be the perfect way to kick start 2021 and we are delighted that other complimentary shows will be taking place alongside MACH for what should be a celebration of UK manufacturing at its very best.”

For other exclusive news and information, visit www.equipment-news.com.

 

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