Market Update

Blogposts about things happening on the market. Such as “10 things hardware startups need to know”.

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Going Glocal: What is Glocality and How Can Cloud Manufacturing Help?

Global businesses must adapt to local markets in order to find success. Hardware businesses are no different, and need to take advantage of technologies available to leverage the benefits of glocality for their business. 

“The world is getting smaller,”  is a common expression nowadays. 

Technology has enabled us to literally move from point A to B with immense speed. It has similarly accelerated innovation and industry evolution at a similar rate. Technology allows businesses today to expand quickly and maintain constant contact via telecommunications and the digital revolution. This is globalization. 

Despite all of this, the world still remains a highly complex place with tight borders  and long distances between places. This means businesses must still think locally when implementing their global strategies. In other words, businesses must embrace glocality and have a solid understanding of what it means to do good business in today’s glocalized world.  

At KREATIZE, we believe glocality is  one of the 10 most important issues affecting the manufacturing industry today. See our full list of issues to consider for 2021.  

What is glocality? 

Glocalization is a combination of the words “globalization” and “localization.” It is used to describe a service or product that is made and distributed globally, but adjusted to better accommodate the customer in a local market. For manufacturing, it is when global hardware companies produce locally to better meet demand.  

“Glocality describes the fact that business operate globally, but need to adapt to local requirements,” said Simon Tüchelmann, CEO & Co-Founder of KREATIZE GmbH in the above interview on glocality. “In the context of manufacturing, this might mean to produce products locally, in order to adapt to security requirements or tariffs” 

Why is glocality important now? 

Glocality is an important topic of discussion within the manufacturing industry for several reasons, but primarily due to: high tariffs, carbon footprint concerns, global events, and time-to-market. 

Tariffs have been increasing in many parts of the world. This is the result of global trade wars between important players such as the US, China and the EU. Political decisions have a direct impact on the cost of producing goods  and the price of importing them from one place to another. 

“The increase in tariffs on imported goods is forcing companies to produce in local markets,” said Tüchelmann. 

By having local production sites companies can manufacture locally and circumvent tariffs on imported goods, allowing them to remain competitive from a price standpoint. 

“The location of production becomes more important because of all these national movements,” said Martin Ohneberg, CEO of HENN, a tier 1 automotive supplier in his talk at our Launchpad Austria event. “For small and medium companies like HENN it is really important to have manufacturing sites in other countries.”

HENN currently has operations in China and is exploring the idea of manufacturing in the  US, according to Ohneberg. 

A desire to decrease our carbon footprint has also pushed the topic of glocality to center stage. In fact, according to a study by the Reuters Institute, “69% of respondents believed that climate change was a very or extremely serious problem.” This shared concern is impacting business decisions and shaping consumer demands as well as legislation. Working with local production sites helps companies lower their CO2 footprint, as transportation costs for goods and materials decrease.   

“The higher importance of CO2 footprint is pushing people and companies to produce locally,” said Tüchelmann. 

Global events with a drastic impact on supply chains are also influencing hardware  companies to shift their production and expand across borders. Such events affect the global supply chain, making a more resilient and decentralized approach to manufacturing essential. 

“The past 1.5 years during the Corona pandemic and the Suez canal crisis show us that logistics costs and disruptions can heavily impact the global supply chain,” said Tüchelmann. “Companies have had to think about different ways of producing, such as with local production.” 

Time-to-market is yet another increasingly important reason why glocality needs to be top of mind for hardware businesses.

“Something I think is very important is the time-to-market for your specific product,” said  Tüchelmann. “By producing at a local level you can adapt the  production of any given product very quickly in order to keep up with demand.”

How can cloud manufacturing help hardware companies deal with glocality? 

To develop an effective glocal supply network by traditional means is a costly endeavour. It could require setting up assembly lines and hiring several people to man various operations, source new partners, and ensure quality. In other words, it’s a very cumbersome process that is both expensive and time consuming.

“Cloud manufacturing provides access to global machining capacities and helps you reduce the time and cost to build a very high quality supply network in local markets,” said Tuchelmann. “You will still need to build your assembly production and set up your logistics, but cloud manufacturing offers a plug and play solution to accessing a top notch supply network.” 

How can I access a cloud manufacturing network? 

At KREATIZE we offer one of the most comprehensive cloud manufacturing networks in the world. We have extensive experience helping companies incorporate our network into their business strategy and can work with you on custom part procurement in a very lean and expedient fashion. 

“One thing that is really important to understand is that cloud manufacturing does not require any investment,” emphasized Tuchelmann. “You basically get the advantage of a global network of manufacturing capacities without any dollar or euro investment. This is very attractive and can be implemented in 2 weeks.” 

Bottom line: an easy and inexpensive way to make glocality work to your advantage is through the effective use of cloud manufacturing. 

Start now by creating your account for KREATIZE Manufacturing Services or by making an appointment with one of our cloud manufacturing specialists today.  

Want to be kept up to date with content on cloud manufacturing and hardware innovation? Then sign up for our newsletter: Cloud Manufactured. 

10 Issues Facing The Manufacturing Industry in 2021

The manufacturing industry had a year like none-other in 2020. Its core system was shaken by market volatility and the need for adaptation became immediate. So what challenges should manufacturing companies be contemplating in 2021? KREATIZE would like to share what we think are the 10 most important, and provide you with solutions to addressing them.

The manufacturing industry has been steadily moving towards its complete moment of disruption for some time. Old systems are being challenged by new players, and legacy companies are reinventing themselves to better address the needs of their customers.

As a manufacturing business, you essentially have two choices, either delay the inevitable and risk being left behind (or worse… face eventual bankruptcy), or adopt the right technologies to ensure your prosperity by taking on challenges head-on.  

Out of the many issues facing the industry we have been able to isolate the 10 most critical issues, we feel manufacturing companies should be considered when establishing their strategic goals in 2021 and beyond.

1. B2B E-Commerce:

We live in a time where we can purchase almost anything with a click of a button. E-commerce platforms are now ubiquitous in the B2C space. The ease they provide in managing services or products is leading those in the B2B space to crave such an experience as well. Therefore, a user-friendly B2B E-commerce strategy is becoming increasingly necessary for manufacturing businesses that want to better sell their products, or proc

ure the necessary components for manufacturing them. By establishing a B2B e-commerce system, manufacturing companies provide greater flexibility, better inventory management, and decrease the likelihood of human error.

2. Customer Service:

Manufacturing has remained incredibly analog as far as customer service goes. As a result, clients are naturally growing increasingly frustrated with having to pick-up the phone to contact manufacturers for customer service needs. The lack of digital self-service customer platforms within many manufacturing entities is a pain point that needs to be addressed by the industry. Creating an effective single point-of-contact to ensure customer needs will enhance the overall business process of manufacturing. This will also enhance retention, the feeling of transparency, and lifetime value for customers.

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3. Skills Gap:

The lack of a capable workforce continues to be a problem in manufacturing. New technologies require workers with up-to-date skills, proficiencies that the industry is struggling to retain and attract to meet current market demand. However, the existence of such a gap can also open the door for the increased use of technology for certain processes. This can in turn allow manufacturers to work in more agile teams with less manpower, and at a lower cost in the long run.

4. Cobots:

Robots are now a common presence across many manufacturing floors. Amongst these are so-called “cobots,” which are robots that collaborate with humans to perform specific tasks. Cobots offer a more agile solution to manufacturers as they are easily reprogrammed by factory workers. They are unlike industrial robots which require an engineer to write new code. Cobots can take on repetitive tasks and handle more risky assignments, allowing skilled workers to focus on more nuanced tasks that cannot be automated. As cobots offer a more cost-conscious chance for manufacturing companies to familiarize themselves with robots on the factory floor, an uptick in demand for this type of robot is likely to occur in 2021 and beyond. In fact, according to research firm Interact Analysis, demand for cobots could increase by almost 20% in 2021. Effective implementation of cobots might be easier said than done though. It will require time and the right partner to reap the full benefits from this technology.

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5. Local-for-Local:

In 2021, as result of ongoing trade-wars and “Black Swan” events (e.g. COVID-19 pandemic), the industrial manufacturing sector is likely to see a shift to more localized production. Global supply chains have proven to be particularly vulnerable to such events, which in turn will encourage some manufacturers to move their activity closer to their customers. A shift to more local production processes means being less impacted by government rules, faster time to market, and more flexibility. This also presents challenges for companies with a global presence, as it may require an expansion of their supply chain into new territories, which is not an easy challenge.

6. Robotic Process Automation:

Another topic that has become quite prevalent in the manufacturing industry is Robotic Process Automation (RPA). By using RPA companies can free-up employees from repetitive, and time-consuming activities that can be more effectively carried out by a software-robot. RPA software mimics human performance for processes such as data entry, calculations, task completion monitoring, as well as logging into and out of applications. Manufacturing companies that adopt RPA strengthen consistency, safety and add speed to their manufacturing processes. They also reduce costs and risks associated with error-prone monotonous tasks.

7. Machine Learning:

The Internet of Things (IoT) is increasingly being used in the manufacturing sector. Some firms have already placed the technology within their machines or are on the cusp of doing so in order to collect data. The latter can assist them in predictive maintenance and provide them with intelligence on the overall usage of their machines for better optimization. However, analyzing and aggregating collected data is a challenging task. Most companies continue to struggle when it comes to being able to extract and analyze information from their machines. Companies that do not find ways to effectively manage and interpret their data are missing out on highly valuable business intelligence. 

8. Agile Project Management:

Manufacturing must adhere to tight and stressful deadlines for bringing products to market. If manufacturers do not meet their deadlines they can face the possibility of losing millions in revenue and profit. Because of the existence of such a rigid culture, many companies in the manufacturing sector fail to make the necessary adjustments while projects are ongoing. This is because a lot of projects require an early design commitment. By committing too early companies become less flexible and cannot make updates based on new data or market conditions. In order to build quality products in a speedy fashion a more agile approach is required. The existence of such rigid deadlines and processes impede, or even handcuff, the professionals who are working to create top-notch products.

9. Cyber Security:

As manufacturers become increasingly more digital in their processes highly-motivated cybercriminals are bound to begin targeting them with more frequency. Of course, technology can also help lower cyber risks. One way companies can lower cyber risks is with specialized partners who can help better manage threats by handling different stages of the manufacturing process independently. 

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10. Cloud Solutions:

Customers in manufacturing shift quickly, which in turn calls for smaller product cycles and quicker go-to-market schedules. As a result, manufacturing companies need to be fast, efficient and quality conscious. With cloud manufacturing, businesses can easily access new facilities and manage market fluctuations because the responsibility lies with the cloud provider. By partnering with the right cloud manufacturing provider, manufacturing entities will have the support necessary to face rapidly changing customer demands and better navigate business uncertainty, as a result of greater flexibility.

Manufacturing entities that successfully take on these issues will find themselves in a stronger position in 2021 and beyond. Of course, this is no easy task and to handle each of these 10 effectively is going to take time. However, one way you can address many of these as a large or small manufacturing business is by working with KREATIZE. 

Our mission is to provide manufacturing the world loves. To help your business provide consumers superior products, to support your engineers in their quest to design the best products, and help you bring products to market seamlessly. With our proprietary and patented software, we leverage the strength of cloud manufacturing to provide customers with access to top industrial facilities via our large network of selected suppliers.

Sign up now for your free KREATIZE account! Let’s make 2021 a game-changing year for your company and manufacturing!