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The new globalisation and rethinking our supply chains


University of Cambridge - IfM
Globalisation Sustainability Global manufacturing

With the advent of new technologies, a changing geopolitical context and ever more pressing concerns about sustainability, are we seeing the emergence of a new form of globalisation?


At the IfM's annual Cambridge International Manufacturing Symposium, leading industrialists, academics and policymakers came together to discuss emerging trends in global manufacturing, and whether the low-cost focus of previous decades is no longer the dominant design factor for 21st century manufacturing supply chains.


The explosion of information and communications technology from the late 20th century has given us the means to connect across the planet as never before. Globalisation, as we understand it today, has its origins in earlier industrial revolutions. The proliferation of railways and large trading ships in the 19th century allowed goods to be moved around the world at scale.


Losing its shine?

But globalisation has become something of a tarnished brand. Developing nations, while providing the low-cost labour that underpins the global economy, face seemingly insurmountable barriers to growing their own export-led economies.

Developed countries are also experiencing political volatility as sections of their populations feel increasingly excluded from the highly visible wealth-creating activities of a perceived global elite. We are seeing a political backlash in countries such as the US and the UK, with leaders looking to protect their industries and control their labour markets.


There are other factors at play. Sustainability, although not wholeheartedly endorsed by all governments, is clearly an imperative for many, and for the majority of multinationals that need to respond to the concerns of their customers, staff and stakeholders. And the big players in global manufacturing are taking their commitment to sustainability very seriously. At the Symposium we heard, for example, about Procter & Gamble's ambition to ensure all its manufacturing sites are carbon neutral by 2020 and DHL's Life Sciences and Healthcare Division's commitment to be carbon neutral by 2050.


Squaring the circle

But sustainability represents something of a paradox: customers around the world demand access to a 'global inventory', refreshed on a daily basis with new products that can be delivered to their door hours later. At the same time, they want large companies to reduce their environmental impact.


New technologies have the potential to square the circle. New production technologies mean we can envisage different ways of organising the movement of goods around the world. Distributed manufacturing can enable the production of goods close to the customer, in small factories with smaller supply chains delivering more personalised products and services at a lower cost to the environment.

Digitalisation can also support the 'circular economy', from smart design, fostering collaboration through to data sharing across supply chains, monitoring usage to prolong life and managing re-use.


However, the scale of change needed to shift the manufacturing paradigm from large-scale global operations to more local-to-market, distributed manufacturing is enormous. But there are perhaps grounds for optimism as large global companies - driven in many cases by the triple bottom line of social, environmental (or ecological) and financial - are trying to embrace the opportunities the Fourth Industrial Revolution presents.




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