We’re in an era where organizations, now more than ever, are focused on the resilience of their business. With the resurgence of manufacturing in the US, companies are turning to diversification and truly embracing the idea of reindustrialization.
Hurdles such as geopolitical risks, potential supply chain disruptions, and economic uncertainty have companies leaning even further into capitalizing on the critical role digital transformation and sustainability will play in this next wave of industrial competition.
Imagine what a factory will look like if we introduce autonomous AI systems, predictive analytics, robotics, cloud computing and other advanced manufacturing technologies. What if we could anticipate, react, and optimize before making any physical changes or breaking ground? This is where digital twins come into play.
For instance, a multinational luxury automotive company created a digital twin of its upcoming $2B EV facility which allowed them to review floor layouts and validate assembly processes in advance – maximizing their operational efficiency.
With immense pressure on multinational businesses’ capital, 84% of organizations plan to invest in advanced technologies to reduce the cost of necessary reindustrialization initiatives. We’ve seen firsthand a global heavy construction organization save $5M in annual costs by digitizing their product lifecycle across all service parts. It’s crucial we help clients think through their factories of the future – how do we leverage these transformative technologies to help us build efficiently? Do we have the right software and processes in place? Have we fully thought through the entire landscape and implications to reduce our overall capital expenditure?
One of the biggest questions companies are facing is knowing where to build based on their supply chain and raw materials. This is where our investments in digital technologies ensure we’re putting the right players in the game.
Every organization values the resilience of their brand – and it just so happens that many of the initiatives to improve long-term efficiency have a beneficial impact on sustainability efforts. Organizations expect an average 10% reduction in their carbon emissions in the next three years due to reindustrialization efforts.
In order to integrate sustainability, resilience, and agility into smart manufacturing strategies, it is crucial companies focus on a smart supply chain to ensure access to raw materials, circular economy principles, and data-driven solutions.
Firstly, the reconfiguration of global supply chains will rely on ‘rightshoring’ – a strategic mix of reshoring, nearshoring, and friendshoring. Digitally enabled supply chains will be an integral part in lessening supply chain pressure as companies look to be closer to their customers, shortening the supply chain and logistical costs. Secondly, incorporating circular economy principles will allow organizations to decrease their reliance on certain resources and in turn find alternate sourcing across the value chain. This will promote supply chain agility, resilience, and provide adaptability to the geopolitical landscape. And lastly, 54% of organizations have already realized more than 20% cost savings through digitally enabled manufacturing facilities and supply chains. Technologies such as AI, machine learning (ML), robotics, process automation, analytics, and digital twins will be key drivers in achieving sustainability and profitability goals.
There are significant benefits in sustainable manufacturing and operations. We’ve seen a multinational corporation save tens of millions just within transport costs and worked on programs that resulted in 2-3% efficiency gains within manufacturing and the supply chain.
Sustainability is now synonymous with viability and resilience. Companies want to know how to protect their investments, irrespective of the economy and climate. We must recognize that while we may be selling sustainability differently, the strategy to reduce operational and capital costs has sustainable implications.
While everyone wishes they had a crystal ball to predict what will happen next, the trend is clear – the manufacturing landscape is vastly changing, and this has global manufacturers rethinking the longevity and autonomy of their businesses.
Companies are steadily taking big bets on digital and advanced manufacturing technologies with the expectation that they will play a significant role in driving long-term adaptability and value. These strategic investments will not only work to offset the unpredictability of the current landscape with greater cost efficiency and supply chain flexibility, but continue to further companies’ climate and sustainability goals.
While easier said than done, the collaboration between suppliers, technology providers, and policymakers will be crucial to the success and necessary innovation that will sustain the manufacturing landscape now and in the future.
Miguel Andrés Sossa-Mardomingo is the Vice President and Americas Sustainability GTM Lead at Capgemini, a global consulting firm. Based in Seattle, Miguel has over 20 years of experience navigating Fortune 500 clients and governments through complex sustainability and organizational challenges.
Franco Amalfi is the Director, Sustainability Strategic Initiatives and Partners North America for Capgemini. Franco is a sustainability expert and digital transformation global thought leader with more than 25 years of experience in all aspects of sustainability and digital transformation.
