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Posted on August 26, 2020

The Proven Benefits of a Distributed Manufacturing Model

Distributed Manufacturing Gives Control to the Parent Organization & Helps Local Economies 

 

Localized manufacturers with their own designers, manufacturing engineers and labor force create an interconnected ecosystem that encourages development and growth of the local economy. This ultimately provides for Democratization of Technology  by becoming more accessible to the local economy and its supply chain. New technologies and improved user experiences empower organizations to more readily access and use technological advancements in products and services.

These companies in the local economies are more connected and have the resources to be successful. It lowers the barrier to entry into the regional market and paves the way for distributed manufacturing to flourish.

The requirements of end users vary by region and are the overarching reasons for using distributed manufacturing. There are many inherent advantages to the manufacturer, which can include:

  • More plentiful and less expensive raw materials in some regions
  • Reduced labor costs from one region to another
  • Lower logistics and transportation costs due to a close proximity to the end users
  • More manageable distribution channels that are physically closer, providing the conduit between the manufacturing plant and end user

Inspiring Creativity and Increasing Motivation

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Plants that are part of a decentralized network provide more independence for the local management. According to a study by Harvard University, decentralized manufacturing actually increases motivation and creativity by giving lower tier managers more responsibilities. When a manager is given a sense of ownership over an operation, efficiency increases among employees in both production and support positions.

Mangers at subsidiary plants typically have greater authority and autonomy when it comes to decision making. It can allow an entrepreneurial spirit to thrive by achieving results for their localized customers and provide a sense of ownership of their operation. This in turn increases efficiency among employees in engineering, production and sales. And because they have more authority to make decisions they are motivated to be creative in finding solutions and experiencing the immediate results of their efforts.

Increased Communication and Flexibility 

If you can walk the walk, speak the language and integrate with the culture, it is easier to communicate with a regional support network. The autonomy given to local mangers gives them more flexibility in their decisions without having to gain the blessing from corporate. Decisions that benefit the customer are made faster and product is distributed to customers more quickly. For instance, product manufactured in Nottingham, England can be delivered to London in one direction or Manchester in the other direction, both in less than two hours. Yet for instance, if that same product is coming from Cleveland, Ohio to Manchester it would travel as freight, likely change planes, and be routed to a distributor once in England, only to arrive a few days after the order is placed (in the best case scenario). If there is any problem with the order, the cycle starts all over. Where in the case of the local manufacturer in Nottingham they could resolve any issues the same day. Reducing or eliminating any potential downtime at the customer.

Understanding the Customer's Needs

A decentralized organization can more easily relate to the local customer, receive more detailed, relevant and current information than a centralized company who is half a world away. A local marketing team can perform research that is relevant to their customers in order to identify their pain points and determine what features of product or supply will benefit them the most. Operating as a small business with the support of a larger corporate entity can be more responsive in meeting the needs of the customer.

These organizations operate multiple facilities that cover large areas with localized distribution, allowing products to be manufactured and distributed in defined geographic regions.


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