What Is The Future of Manufacturing?
Since the start of the Industrial Revolution, manufacturing organisations have located near to pools of cheap and available labour: low-cost labour has been the magnet that drew in manufacturing systems.
Several important developments are now gathering speed which threatens this previously universal manufacturing principle:
- As technology advances, this will reduce labour costs as a percentage of any product’s cost. Think of automation and technology replacing labour in car production systems.
- Location to raw material sources will become more important: this reduces transport costs of bulky commodities which then lowers overall cost.
- Location will be nearer to demand, reducing transport costs and offering better response times to meet changing and possibly unpredictable customer requirements. This is seen with the locavore food supply developments and focus upon the Food Miles concept.
- Regulation is a key driver for the location of manufacturing operations: local regulation offering more freedom will always outweigh the importance of low-cost labour, which can always be shipped in.
- Environmental protection: lower control means greater freedom, regardless of any other factor to be considered.
Whatever the future holds for the future of Manufacturing, the importance and relevance of labour as a factor of production has had its day.
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