March, 2020

Manufacturing as a Service (MaaS) is Good for U.S. Factories

Continued from previous page

and automation are making “Made in America” prod- ucts much more affordable than ever before and clos- er in real cost of ownership to many offshore options. But, U.S. manufacturers compete with re-

gions where labor costs are substantially lower and utilization is much higher. This combination can make regions with higher labor costs, like the U.S., less competitive, which again reduces utiliza- tion. MaaS allows manufacturers to use a plat- form’s elastic demand how and when they need to adjust their utilization, allowing them to keep op- erators and equipment busy when their regular customers are quieter. A lot of discussion around the digital trans-

formation of manufacturing focuses on Industry 4.0 and the digitization of manufacturing processes. This fo- cus, along with greater automation, will certainly improve the competi- tiveness of U.S. manufacturers. But, that focus risks ignoring the digitiza- tion of business processes, which it- self offers great additional value to both customers and manufacturers. As MaaS grows in popularity,

platforms like MacroFab extend the digital transformation of purchasing and supply chain processes. Macro- Fab already has more than 40 facto- ries providing manufacturing servic- es to its growing customer base, pro- cessing thousands of orders for hun- dreds of companies. Many are referring to this model

as EMS2.0 (the second outsourcing revolution) as it disrupts the industry in a way unseen since the large-scale adoption of EMS nearly 50 years ago. That revolution saw a complete change in the way manufacturing and pro- curement occurs, creating a huge new industrial sector through improve- ments in machinery and automation. Expect this revolution to do the same, on the customer-facing front. For the factory managers, upping

utilization makes them more competi- tive and can allow them to grow and develop, acquiring new capital equip- ment and delivering new solutions. In many cases that will make them a bet- ter solution for their existing cus- tomers and a better prospect for new accounts. Either way, they will have even more potential and agility. Filling idle capacity fast is hugely

valuable, as is winning new business, without the additional cost and lead time of sales and marketing efforts. According to MacroFab CEO Misha Govshteyn, “On average, factories in the U.S. have more than 30 percent available capacity at any given time.” And, a company that wants to

invest in new technology, like an in- telligent X-ray inspection system, for example, may want to work with these marketplaces to get immediate revenue from that investment. Oth- ers may use the platform during leaner periods or as a method of bal- ancing demand and capacity.

Regionalization and Industry 4.0 The manufacturing world is con-

stantly changing, reflecting the wider economy. One major trend we are currently seeing is regionalization, due to macroeconomic influences, such as tariffs and rising labor costs in China. A shorter supply chain, with production close to consump- tion, makes a lot of sense. Brands even appear to value this

over just seeking a region with the lowest price. This is good news for any

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region that has a major consumer base, like the U.S. In addition, Industry 4.0 and automation promise a more level manufacturing playing field, due to a re-

Lean manufacturing techniques and automation are making “Made in America” products much more affordable than ever before and closer in real cost of ownership to many offshore options.

duction in the labor portion of production. This triple play of MaaS, Industry 4.0 and re- gionalization are all great news for U.S. manufac-

turers with their eyes fixed on the future of manu- facturing and who are prepared to embrace the digital revolution of their industry. Finally, as we move to an experience-based

economy, the user interface is becoming increas- ingly important. As digitally native millennials find themselves in purchasing roles, they will look for more intuitive interfaces to manage their pur- chasing and supply chains. Those embracing MaaS have much to gain, both

on the supply side and on the demand side. Those ig- noring the trend risk being left behind, or worse. Contact: MacroFab, 2000 W. Governors Cir-

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