How Manufacturers Can Compete in an Age of Both Globalization and Localization

Pivot International  |   August 22, 2017

Today’s manufacturing landscape is prominently characterized by two seemingly competing forces.

On the one hand, there’s globalization. On this side, you have facts like:

• Emerging markets are demanding a greater supply of goods.
• Supply chains are growing more sophisticated.
• Products must compete on a truly global scale.

On the other, there’s localization. On this side, you have issues like these:

• 3D printing is disrupting the manufacturing sector.
• Product designers are demanding smaller manufacturing runs.
• Popular opinion is heavily focused on keeping manufacturing jobs at home.

How are manufacturers to balance this wide range of concerns, while still being competitive?

First, they must realize one simple truth.

Globalization and localization don’t necessarily have to be opposed.

Think about any two opposing viewpoints. Let’s take something as trivial as golf as an example – one person thinks it’s the best sport on earth, while another thinks it’s a total waste of time.

Once each person decides to back off of their black-and-white thinking a bit, they can almost certainly meet each other in the middle of the road on certain things. They might agree that golf gives you an excuse to be outdoors on a beautiful day. Perhaps they agree that yes, the sport can be pretty boring at times.

When we stop seeing globalization and localization as necessarily opposed to each other, we see that many steps that manufacturers are taking to stay ahead of the curve can satisfy both needs.

What’s most important is that our organizations are working to embrace new technology, create good jobs for our workers, and use our resources with an eye to what the future will look like.

Key developments that every manufacturer must consider:

Sustainability in the age of climate change.

Sustainability has been a concern for manufacturers for decades, but as the effects of climate change – extreme weather, sea level rise, etc. – are becoming more real, manufacturers are needing to step up their game.

This is especially true in Southeast Asia, where so many manufacturers now have facilities.

Adopting sustainable policies now will help manufacturers compete in the global marketplace, while also benefiting the communities where factories are located.

3D printing is a disruptive technology that has the potential to make manufacturers more efficient and effective.

A lot has been said about how 3D printing is going to put manufacturers out of business. If individuals can purchase a printer and print one or two of whatever they need, why would we need huge factories?

This is appearing to be more fantasy than reality though – or at least, if it is reality, it’s many decades away.

What’s happening instead is that many manufacturers are adopting 3D printing technology themselves to cut costs, reduce waste, and free themselves up to work with smaller clients as well as large ones.

In this way, 3D printing can allow companies to work with their local business community for the first time, while still maintaining their larger, global operations. 3D printing can therefore add to a manufacturer’s business – it doesn’t have to take away from it.

The Internet of Things (IoT) and cloud data management are allowing manufacturers to work with companies anywhere around the globe.

The technology advances we’re seeing in every industry, including manufacturing, is almost unprecedented.

The IoT has allowed for the development of smart machinery that can talk to computer systems and robots in factories and supply houses thousands of miles away. Cloud data management allows for the sharing of data among the exact people and departments that need it, whether they’re on a plane or on the factory floor.

These advances mean that the potential for efficiency has never been higher. At the same time, it’s meant the creation of thousands of high-paying, skilled jobs in the U.S. and Europe, as well as in other countries.

The challenge for manufacturers everywhere, going forward, will be to nurture the pipeline of skilled workers who can fill these jobs. And there’s nothing that’s of more local concern to real people than the job market.

Manufacturers can balance the needs of globalization with the push toward localization. To read more on this topic, check out my post “What Do the Next 10 Years Look Like for Manufacturing?”