1 The Mads Clausen Institute, Faculty of Engineering, SDU2 SDU Technology Entrepreneurship and Innovation., The Mads Clausen Institute, Faculty of Engineering, SDU3 The Mads Clausen Institute, Faculty of Engineering, SDU
The characteristics of manufacturing are changing. An analysis to indentify future Western European manufacturing challenges illustrated several important issues. Among them: global fragmentation of production and increase in back-shoring, increased individualization, the increasing effect of demand fluctuation and seasonality, the negative effects of over-optimization, and the scarcity of resources that will change the global footprint of manufacturing. These challenges illustrate the need for new competitive advantages for Western European manufacturers, namely responsiveness, scalability, and customization towards customers and consumers, even at the expense of current competitive advantages such as price reduction. The paper examines the opportunities and advantages in setting up a network of glocalized self-sufficient supply chains around an intelligent changeable production facility. In contrast to current global manufacturing that advocates mega-factories with global supply chains, this paper hypothesizes that in order to achieve competitive advantages in the future, manufacturers will have to decentralize their production globally with a local focus setup. At the center of this system is a changeable and reconfigurable production facility. This smaller but intelligent facility is able to completely supply a predefined market area. By doing so, manufacturers will be able to reduce lead time and forecasting periods, increase customization to particular markets, utilize local energy production, and rapidly respond to real-time demand changes.