Domestic Manufacturing: Why Europe (the EU) is again a viable option

For years, manufacturing in countries like China seemed like a foregone conclusion for anyone with an eye for the bottom line. Of course you’d manufacture in China, the traditional thinking went, because the labor there is undeniably cheaper. I contend that this manufacturing paradigm is on the verge of completely transforming: Products designed in Europe can now also be built in Europe, while at the same time saving money.

How? Because automation has now reached a level of flexibility that allows it to affect what is often the most labor intensive aspects of manufacturing: The assembly of the final product.

Download "The Evolution of Hardware Now and Beyond"

Most of the landscape of domestic manufacturing has already changed:

• On on electronics side, printed circuit board (PCB) manufacturing is automated, Surface Mount Technology (SMT) allows the automated production of Printed Circuit Board Assembly (PCBA), and thanks to Automated Optical Inspection systems, the inspection of the PCBA is automated. All these already removed the principle advantage for manufacturing electronic components in a low-labor-cost country like China.
• On the mechanical side, plastic part made by the Injection molding process often do not need the presence of an operator to run.
• On the metal part side, the machines used for Machining (vertical centers, computer numerical controls (CNC), multi-axis machines, etc.) can be automated and only requires manual loading and unloading (and even that can be automated). Also here, companies are turning to automated inspection via contact system or 3D vision-modeling systems, allowing them to run lights-out factories and decreasing manufacturing costs.

You can see the trend forming here: automation is ascendant. But assembly was still a very manual process when some flexibility was needed.

However, with the advances in communication and in programming, we see more and more SMART factories coming online all the time. And this is why we are at a tipping point: With the help of smart automation, of robots, and of cobots (i.e. collaborative robots), these flexible organizations enable the assembly and handling of products with a minimum amount of human labor. We are on the verge of a Fourth Industrial Revolution. The key, of course, will be designing products so that their assembly can be automated.

For these and other reasons, I predict that manufacturing in Europe will grow. More and more of the manufacturing and assembly of products designed in Europe will also be built in Europe -- closer to where the customer is, and at a savings to savvy companies. The only question is: Which companies will lead the way?

If you’d like to learn more about Dragon Innovation’s Europe office please get in touch!

Nicolas Avril is the VP of Dragon Innovation's Europe office