Executive Briefings

More Firms Consider Nearshoring Production Thanks to Automation

Companies in developed markets are increasingly nearshoring production as the labour cost advantages of manufacturing in places such as China have eroded, according to a new report.

Alix Partners' report Homeward Bound said businesses in the US and Western Europe were facing a new challenge as they move production facilities closer to their main bases of consumption.

The difficulty is that not all local labour markets can meet rising demand, which means the onus increasingly falls on automation to offer a solution.

With automated technology such as robotics having made tremendous strides over the past five years, capabilities have dramatically improved and costs plummeted.

“Today this kind of technology can help manufacturers augment — or entirely replace — functions previously performed entirely by humans,” the report said. “To exploit those technologies, manufacturers will likely have to make capital intensive investments.”

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Alix Partners' report Homeward Bound said businesses in the US and Western Europe were facing a new challenge as they move production facilities closer to their main bases of consumption.

The difficulty is that not all local labour markets can meet rising demand, which means the onus increasingly falls on automation to offer a solution.

With automated technology such as robotics having made tremendous strides over the past five years, capabilities have dramatically improved and costs plummeted.

“Today this kind of technology can help manufacturers augment — or entirely replace — functions previously performed entirely by humans,” the report said. “To exploit those technologies, manufacturers will likely have to make capital intensive investments.”

Read Full Article