The concept of fully automated ‘micro-factories’ supported by the local supply chains has proved to be extremely resilient during the COVID-19 crisis.
MSEs are building their infrastructure from scratch, focusing on doing things differently, with small but fully automated factories. These factories are powered by industry 4.0 technology, strengthened by warehouse automation. For bigger manufacturers, installing such technologies along with other crisis-induced operation changes was a comparatively slower process – thanks to the long approval and discussion processes.
For big established OEMs, the struggle to maneuver through the changes was tougher; it’s like turning the Titanic. As experts across industries cheer for Industry 4.0, everybody wants to implement warehousing automation – it is never going to be an easy transition. That’s because established manufacturers cannot press a pause button suddenly and stop all orders without losing out on customer satisfaction, and then realign budget to allocate and reinvest funds for Industry 4.0.
Micro-factories in this regard are like speedboats compared to the bigger OEMs’ ‘Titanics.’ Some manual assembly is expected initially, but if the company targets to start manufacturing exclusively using robots – the journey is really long.
Large factories and bigger manufacturers are inefficient unless they operate at full capacity. At this point, if there are expansion plans afoot, a new factory is required to be built. It’s not dynamic, regardless of the industry or sector, everything ultimately boils down to being agile and capable to promptly respond to the market dynamics.
To build the micro-factories very quickly, companies are taking typical warehousing spaces, building them near to the city centers and customer bases.
In addition to automation, one of the other critical aspects of the micro-factories is to have a well-established local supply chain. It is important for manufacturers to explore local manufacturing capability. Hence, rigorous research on market expectation is important.
The COVID crisis is pushing firms to change the way they operated traditionally, reaffirming that working with local suppliers and being vertically integrated is the right way forward. This not only confirms doing the right thing for local economies but also from a business perspective, it makes companies much more sustainable.
But, it is certain that whether it’s an OEM, start-up, or micro-factory, the pandemic has completely transformed the way factories operate. The dependency on automation and machines has increased, multiplying the pace of digitization. This perhaps could be the right opportunity for highly automated Micro factories to take the fast route to growth!