Advanced Computing in the Age of AI | Friday, March 29, 2024

Reweaving the Global Supply Chain 

<img style="float: left;" src="http://media2.hpcwire.com/dmr/chain.jpg" alt="" width="95" height="71" border="0" />The supply webs manufacturers are weaving are expansive and complex, with designs originating in the United States and traversing the globe, often to be manufactured in China. But according to a recent report conducted by IBM, we may be in for a change. Instead of a global supply chain that is long and complicated, we may soon see it transform into something small, simple, and local.

The supply webs manufacturers are weaving are expansive and complex, with designs originating in the United States and traversing the globe, often to be manufactured in China. But according to a recent report conducted by IBM, we may be in for a change. Instead of a global supply chain that is long and complicated, we may soon see it transform into something small, simple, and local.

This should be music to the ears of anyone keeping track of the reshoring front, but interestingly enough, IBM hasn’t pinned the cause of this supply chain transformation on pushes for reshoring from government and industry. Instead, it expects that the change will come from the inevitable boom of 3D printing adoption, intelligent assembly robots, and open-source hardware. Rather than relying on manual labor to control an assembly line, each of these tools is pushing manufacturers toward an environment where everything is controlled through software and data files. IBM anticipates that this will soon take the next step to become a “Software-Defined Supply Chain.”

The study took a two-prong approach to its research, looking both at a face-to-face survey of 55 executives across ten countries, as well as a quantitative model designed to measure industry changes. The model examined four test cases by deconstructing products, analyzing materials and assembly costs, and creating a software-defined manufacturing model to estimate how it would be made and distributed in this new supply chain.

As the report explains, ever since the creation of the Model T’s assembly line, manufacturing has increasingly favored standardization of parts, and module-based assemblies to help simplify and expedite the production process. More recently, controls have begun to shift away from intimidating arrays of levers and knobs toward sleek and simple digital interfaces.

The advent of open source electronics has given a boost to the trend toward digital simplicity, however, as more companies turn to 3D printing and robotics, researchers found that the trends of module and standardization-driven manufacturing were actually reversing. Instead, customers are looking for customized products with unique parts, and assemblies using robots are shifting back to a component-based approach.

And IBM expects this shift to occur relatively quickly. With key additive manufacturing patents for laser sintering expected to expire, the industry can expect to see high-resolution, sturdy metal products become an integral part of the prototyping processes as well as high-volume assembly lines. While the technology is not yet ideal for mass production, the researchers expect a 79 percent reduction in the printing cost of an average object within five years, which they expect to jump to 90 percent over the next ten years.

One case study in particular illustrated the allure of lower-volume, customizable design. For hearing aids, a software-defined supply chain meant a 65 percent unit cost reduction and reliance upon fewer external suppliers.

As far as the supply chain goes, a 3D-printing boom would simplify the supply chain by cutting a number of intermediaries. In some cases, this could mean mold and casting producers will play a decreased role, while sub-assembly providers may be cut altogether as labor costs and the cost of capital equipment become less important.

The idea is that nearly any solid part can be produced through additive manufacturing, and then assembled by robots, which can boost efficiency and, according to IBM, lower costs by an average of 23 percent. But the idea of lowering costs isn’t new. What’s significant will be the relocation and simplification of the supply chains we know today.

By untangling some major knots in the supply chain and bringing everything closer to home, the report predicts that barriers to manufacturing will be reduced by a whopping 90 percent, which could spell some major restructuring for the whole of the industry.

Within the electronics industry in particular, however, the research suggests that different industry segments will be affected by this change at different rates. Up first are consumer electronics, white goods and medical device segments, which IBM expects to become democratized within the next decade. This means that customers are expected to have a heavier hand in the design process, which will in turn become more localized.

In turn, this suggests a shift in the competitive arena as companies are forced to out-customize one another to best meet a customer’s needs, and adjust basic marketing and retail strategies around that. Within the decade, IBM expects that for a number of these businesses to survive, partnerships are likely to turn competitive, as companies cut from an extended value chain are forced to enter directly into the commercial market instead of operating solely as a supplier.

According to the survey, half of respondents had no manufacturing strategy to meet the demands that come with digitization. But with the report’s estimates the transition coming within the next five to ten years, for manufacturers who don’t jump on the boat, it’s likely to be sink or swim.

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