There was a time when outsourcing business processes to Asia was a no brainer for manufacturers, simply because of the massive advantage on offer; cheap human resources. In the recent times, the economic turbulence that the world has faced has affected mature markets more than it has developing economies. This, in addition to the fact that developing economies have progressed in their own right, have considerably lessened the advantage of outsourcing. Businesses in mature markets are now looking for newer solutions to overcome the liabilities posed by outsourcing and thus, a new generation in supply chain management known as last-mile manufacturing, has come into being.
WHAT IS THE LAST-MILE MANUFACTURING?
Last-mile manufacturing (LMM) is the process where a company’s product sourcing is outsourced at the sub-assembly level but brought back at the end-stage, to the country of origin, and configured to suit consumer requirements in that market. Essentially, this eliminates the end-to-end services provided by offshore companies and is a likely game changer for all parties concerned.
Terminating the local end of the manufacturing process close to its final stages and bringing the final stage of process back to the country of origin is known as last mile in manufacturing.
WHY GO THE LAST-MILE IN MANUFACTURING?
LMM provides the manufacturer numerous advantages with one of the most salient being the ability to customize. By bringing the last-mile to the country of origin, the manufacturer can customize a generic to suit local consumer needs. This process also significantly reduces inventory and that is a money saver. One of the most interesting ways LMM helps manufacturers is in protecting their intellectual property. As past incidents of theft and duplication have shown, this is an area of vulnerability for most.
However, getting up to the point of LMM still holds challenges for manufacturers.
It must be noted that the success of LMM is based on the timely arrival of semi-finished goods from various parts of the globe for their final assembly at the country of origin.
In this regard, LMM is aided by mobility in manufacturing and the advent of Internet of Things. Take, for instance, tracking the production of goods at the sub-assembly stage. IoT devices fitted in manufacturing machines help in predicting the maintenance cycle to prevent a breakdown during production time and in determining the status of production. This leads to an optimum utilization of resources through better inventory and warehouse management and ultimately, a lower cost of production for the manufacturer.
LMM also allows manufacturers to give back by way of generating jobs in the country of origin and that is seen as a big positive.
WHERE TO FROM HERE?
LMM evens out the playing field by indirectly making world economies less dependent on each other. There is an opinion that China’s future as the hub of outsourcing hangs in the balance. China is still likely to see outsourced activity in areas where it holds a distinct advantage but its supremacy in this space will be checked. The spread of LMM will impact business process outsourcing but a lot depends on the adoption of suitable technology by manufacturers.
With economies interconnected today at global level, LMM addresses the key issues by indirectly making the economies in the world less dependent on other economies.
With enterprise mobility, IoT and data analytics easing up the way businesses function, the question remains, who will adopt fast enough to emerge as the leader of the pack?
ADDING VALUE TO WORK
Unlike its predecessors, Gen Y is extremely comfortable using technology to simplify work tasks and as millennials assume positions of leadership at organizations, the expectation is for technology to help save time, money and increase productivity. Think clutter free work spaces and conference rooms minus cumbersome gadgets and that’s the direction offices are moving in. This shift in gears can also be seen and experienced as companies move towards integrating big data and cloud computing in to their business functions. Accordingly, tech services are gearing up to meet the demand for smarter products that are customizable, easy to access and meet needs in real-time.
It must be said that this passage of time is only phase one in wearable technology and early adopters are faced with steep costs and working past bring your own device to work (BYOD) policies. The struggle to own and use wearable tech to address pain points on a daily basis is very real and yet, fairly individual. For manufacturers to acquire a sizeable, loyal consumer base and stay ahead in this battle for market, what they need to address is the aspiration that Gen Y has for wearable tech and other allied tech streams that the advent of Internet of Things has brought with it. The crux lies in gaining larger corporate acceptance as that will enable an entire generation to adopt faster and for manufacturers, that’s also where the largest slice of the pie is at.