For the past four decades, businesses have moved manufacturing to low-wage countries in order to reduce labor costs. That strategy succeeded in boosting corporate profits, but it has now been shown to be vulnerable to disruption. COVID-19 has created most of the supply chain problems companies are currently experiencing, and some companies may feel another pandemic in the next 10 or 20 years is unlikely (experts disagree). But it can’t be denied that climate-related disasters, political unrest and other factors could continue to wreak havoc on global supply chains.
There is a solution, of course: Move manufacturing back to North America and Europe, where the major markets are located. That might seem impossible, given the labor costs in these countries, but technology offers a way to produce more with far fewer people. Robots can produce a wide variety of goods, and when you combine advanced robotics, vision technology, radio frequency identification and artificial intelligence, robots can produce customized products as well as humans.
A robot could, for example, be outfitted with an RFID reader at the end of its arm so that it could distinguish between a wide variety of similar-looking components to pick up and affix to a subassembly. Vision technology could enable the robot to distinguish items, as well as determine the precise location where they need to be installed. What’s more, artificial intelligence could help the robot learn new tasks.
Of course, robots can’t do everything humans can, so some labor would still be required, which is a good thing for communities that have lost most of their manufacturing jobs. Low-wage countries would lose investments, but there would still be low-end products produced in these nations—and as they became wealthier, local manufacturers would make goods for the local population.
Do I see this happening? Not in the near term, no. Building new factories and moving manufacturing back to major markets takes time. But as we see more supply chain disruptions and a demand for greater flexibility, I think a growing number of companies will realize that making goods closer to market makes good sense.
Mark Roberti is the founder and editor of RFID Journal.