Manufacturing and Value Chains

How innovative manufacturing solutions can help fix global supply chains

Making the manufacturing sector fit for purpose.

Making the manufacturing sector fit for purpose. Image: Getty Images/iStockphoto.

Theo Saville
Chief Executive Officer, CloudNC
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  • Globalisation has caused domestic production to stagnate in countries such as the US and the UK.
  • Global supply chains have been disrupted by multiple crises and the current system isn't fit for purpose.
  • Technological breakthroughs could help get us the goods we need and want in a more efficient and environmentally-friendly way.

Recently, supermarkets across the UK have experienced shortages of fresh vegetables. The cause: an unfortunate combination of cold weather in growing regions, coupled with high energy prices that have pushed up costs for wholesale buyers.

However, this isn’t an isolated occurrence. Usually, we expect to be able to buy what we want, when we want, but recently in the UK, we’ve run short of commodities like eggs, petrol and toilet paper. And across the developed world, it’s also been hard to get hold of more complex products, like microchips, cars and games consoles.

Fundamentally, global supply chains are breaking down. Before COVID-19, the extent of the problem was clear: Western manufacturing capacity has been hollowed out by globalisation, as utilising overseas labour is more cost-effective, reducing the ability of developed countries to compete.

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As a result, domestic production in countries like the US and UK has stagnated. And as Western manufacturing sectors atrophy, there’s little incentive for younger workers in those countries to pursue a career in an industry that often involves energy-intensive manual labour, with weak future prospects. That means older workers aren’t being replaced as they retire, resulting in valuable skills and knowledge being lost, compounding the overall decline.

Consequently, when crises do occur, manufacturing has been hard-pressed to step up and help. When COVID-19 hit in earnest, hospitals desperately needed ventilators – but developed nations didn’t have the capacity or ability to make them quickly and efficiently. Only a massive global mobilisation effort – involving procurement from thousands of suppliers – scrambled together what was required, at vast expense, and not quite on time.

Since 2020, the war in Ukraine and the global cost-of-living crisis have further stretched global supply chains to breaking point – showing that how we currently produce goods and bring them to market isn’t fit for purpose.

Can we fix supply chain problems? Or is how we make what the world needs broken forever?

Trusting the manufacturing process

For answers, policy-makers will naturally look at the big picture: how to protect domestic industries with measures like trade barriers, tax incentives and talent development schemes.

But measures like these cure only the symptoms of the disease, not the cause. We need to make manufacturing itself faster and more efficient so that when global crises hit, the sector becomes part of the solution, and not the problem.

Today, how everyone makes manufactured goods is pretty inefficient. For example, a complex metal component that comprises part of a larger item – for example housing that connects a vehicle seat to a chassis – is made in a computer numerical control (CNC) machine.

A CNC machine isn’t easy to use. The interface is complicated and non-intuitive, and it requires a great amount of expertise to operate efficiently. Even a simple component can be made in billions of possible ways, and if the machine is programmed non-optimally then the manufacturer wastes resources – both time and materials.

Estimates suggest that because of those problems, and combined with the further scheduling issues they create, some precision manufacturing factories may run at only about 10% of their theoretical capacity.

In other words, there’s a huge amount of redundancy built into the current system. If we could remove that – for example, by improving scheduling, or tool usage, or operator ability – we could dramatically improve how effectively manufacturers are able to operate.

At CloudNC, we’re working on solutions which include software to accelerate how quickly and easily a new component can be programmed for a CNC machine, shortening the production process by hours.

In time, we hope to enable manufacturers to produce anything they want with a single click, potentially making factories up to 10 times more efficient than they are today.

A computer numerical control (CNC) machine. manufacturing
A computer numerical control (CNC) machine Image: CloudNC

Sense checks and waste

Working in a similar vein, Augury is an Israel-based unicorn that uses new technology to stop factories and machines from breaking down – keeping supply chains operational and functional.

The scale-up makes wireless sensors that pick up the sounds emitted by factory equipment, and then analyses those sounds with artificial intelligence, detecting patterns that reveal whether the machines are working flawlessly, or about to run amok. It’s an extra sense check (literally), building smart technology into the production process itself, that allows operators to intercept problems before they happen.

That’s important, given that a single broken-tool event can cost at least $1,600 per instance – without factoring in the extra hassle of lost orders, overtime and other challenges created by unexpected production line outages.

Similar efficiency gains can be earned by taking better care of inputs and outputs. For example, by reducing the amount of material needed to produce a component, or decreasing the waste involved in its manufacture.

Solugen, a US-based chemicals company, is doing both: it’s applying enzymes and catalysis to corn syrup, transforming it into chemicals used in almost every industry, including manufacturing. In doing so, it’s able to eliminate the use of fossil fuels like oil, coal and natural gas from the process, reducing both the cost and the carbon footprint.

In theory, Solugen’s solutions could produce some 90% of the chemicals today that we currently use fossil fuels to produce. So, if the company can scale its output globally, it could change the paradigm for any industry that uses chemicals in large quantities, such as manufacturing.


How is the World Economic Forum contributing to build resilient supply chains?

Global supply chains in the future

In the future, if innovations like this help make factories operate more efficiently, what would that mean?

Immediately, more cost-effective production processes level the global playing field, meaning factories in developed nations are again able to compete on price against their counterparts elsewhere.

In turn, stronger domestic sectors mean shorter supply chains, reducing the overall environmental footprint, while also reducing the threat posed both by disruptive global crises like the Ukraine conflict, or the Suez Canal blockage in 2021.

But what about the manufacturing talent gap – estimated to hit 2.1 million jobs in the US alone by 2030? Well, with technological progress, we can make the current production process easier and simpler, meaning workers with less skill and experience can still produce high-quality components accurately and reliably.

Add all those together, and you have a manufacturing sector fit for purpose – able to produce goods efficiently, effectively and in a way that’s better for the environment. But perhaps more importantly: the industry stops being a bottleneck that prevents the world from innovating.

Today, bringing a new product to market (from conception to production) might take two years. What if that wasn’t the case, and the manufacturing sector was able to operate more like the digital world – if we think of something, we can create it?

It’s a future where global supply chain issues don’t constrain innovation, and when we need products, we can get them. With technological advances, getting to that point is within touching distance: in time, we will live in a world where, when we urgently need ventilators or other equipment to alleviate a global crisis, we will be able to push a button and get them, delivered by a manufacturing sector operating seamlessly and efficiently.

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Manufacturing and Value ChainsSupply Chains and Transportation
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