As a result of recent global disruptions, manufacturing will likely see a fundamental shift away from globally distant footprints toward a more localized model, with nimbler and more flexible structures.
In 2021, the industrial manufacturing sector will take a page from the consumer-driven “farm to table” trend that has taken hold in the agriculture industry over the last decade, with a shift to localized production.
This will primarily be driven by the threat of ongoing trade war/tariffs threatening global supply chains, encouraging manufacturers to move production activity closer to the customer. In the future, manufacturers will want to build where they sell for several reasons, including faster time to market, lower working capital, government policies, and increased resiliency.
The pandemic also gave manufacturers a painful lesson about the fragility of relying on labor, access to physical space, and centralized factories half-way around the world to produce goods. Fortunately, advanced technology – sensors, machine learning, computer vision, robotics, cloud computing, edge computing, and 5G network infrastructure – has proven to increase supply chain resiliency for manufacturers who adopt it. While manufacturing lines present a unique set of challenges, tech companies will continue to focus on bringing the value of these advancements to verticalized settings as the industry realizes they must diversify their factory operations and embrace Industry 4.0 technology to become more resilient.