In 20 years’ time most manufacturers will be service firms based around a manufactured product, according to Nick Scheele, chairman of the Foresight Manufacturing 2020 panel.
The panel’s preliminary findings, announced this week, predict that locally-based manufacturing will replace global supply chains, while the internet and an efficient road transport network will be critical to industry’s transformation.
Scheele, president of Ford Europe, kicked off a process of consultation over the panel’s findings, with a roadshow that will tour the UK. A final report will be produced in a year’s time.
`Where once we manufactured physical products for one-time sale, the shift is increasingly towards building a long-term, strategic relationship with customers to serve their total needs based around a manufactured product,’ said Scheele.
He held up General Electric as a pioneer of this approach, with a mission to be a service-lead company based on the supply of manufactured products. GE makes gas turbines but sells power by the hour to customers and takes on the risks of maintenance and breakdown.
Companies such as Dell Computer and Case are showing the way to a future in which batch manufacture would give way to the manufacture of products `at high speed and in high volumes tailored to individual customer’s demands’, Scheele said. To satisfy demand more quickly and reduce transport `we are likely to see more local, distributed manufacture taking hold’.
The key to this happening would be the internet, which Scheele called `the catalyst and prime enabler for the most radical change in manufacturing since the industrial revolution’.
It would bring opportunities for data-intensive and knowledge-intensive activities like on-line diagnostics and product development.
But from a logistics point of view there would be a trend towards `more small-lot, shorter-distance distribution with shorter lead times’, putting a premium on the effectiveness of the road network.
Scheele said rail transport is too slow, inconvenient and needs far more investment than currently envisaged to make a difference to transport problems. He looked to solutions such as electronic guidance systems to allow a greater density of traffic on existing roads. `We see roads as critical,’ he said.
* Foresight can be found at: www.foresight.gov.uk