03 May 2018
5 reasons why ports will be the new manufacturing hotspots
The manufacturing sector is facing a serious shake-up. Technological disruptions such as 3D printing, machine learning and robotics are changing the way goods are designed and built, as well as challenging traditional notions of the supply chain that births them.
Advances in 3D printing and additive manufacturing make the means of manufacturing more accessible to businesses that may be tempted to bring their productive-base in house and go straight to customer. IDC estimates that, by 2020, 50% of all manufacturing supply chains will have the capability – whether it’s in-house or outsourced – to go direct to consumer with home delivery.
All the benefits of this dawning era in manufacturing can only be attained if companies reassess and consolidate their supply chains. A lesser need for traditional warehouse space, increased capital mobility due to advances in 3D printing and the ability to manufacture-on-demand creates multiple incentives for firms to bring their manufacturing base closer to key logistics hubs, such as ports.
Here are five reasons why we think ports are set to be the next manufacturing hotspots:
- Reduced delivery times
It’s quite simple: the quicker you can get your goods to the port, the quicker they will be dispatched to the next stage in the supply chain, be it directly to the customer or a retail facility. Shorter lead times on each good makes the supply chain more responsive to the ever-growing demand for faster, cheaper delivery. With this consumer trend that shows no sign of abating, the supply chain certainly needs to wise-up and shape-up.
A wide-scale embracing of 3D printing and additive manufacturing will make the productive base of firms more responsive to customer demands, especially when it comes to highly specialised items. The capacity to create a wide range of products on lower-volume runs, combined with being able to get goods distributed fast and efficiently makes for a lean, robust supply chain.
- Minimise touch points
By basing your productive base next to your logistics hub, you compress the manufacturing side of the supply chain by removing several steps or touch points. These touch points in the manufacturing supply chain usually incur a cost as the procurement and transport of raw materials can often become complex and involve multiple partners - all of which have a price. Reducing the number of gatekeepers can create efficiency savings, which will ultimately result in better prices for customers.
Bringing manufacturing to your logistics hub minimises touch points on the manufacturing side and, in the process, reduces the risk portfolio of your operation, meaning happy investors, as well as happy customers.
Solving the first mile/last mile challenge is a must for any company wanting to turn its supply chain into a competitive differentiator. DP World mainly only operates Origin and Destination ports, which means we’re the first port to touch the cargo and the last port to touch the cargo. This opens lots of opportunities to conduct value adding work on either end to help perfect the ship-to-shelf process.
- A single, integrated business hub
In a world of booming e-commerce where speed is king, having an integrated business model that allows for flexibility will become a necessity. By moving the manufacturing base of the business to the port, firms can integrate manufacturing, stock rotation and intermodal distribution in one geographical location.
Add 3D printing and additive manufacturing to the equation and you’re got the capacity to manufacture on demand and distribute almost instantaneously – an irresistible combination in a market dominated by the end-users’ whim and wants.
A greater integration of 3D printing and additive manufacturing into business processes makes the supply chain far greener. These forms of manufacturing are far more resource efficient than traditional manufacturing, cutting out costly waste from the manufacturing process. The improved efficiency of 3D printing and additive manufacturing also means you need lesser raw materials to create the same output of goods.
What’s more, if your manufacturing hub is located in port offering and intermodal solution, like DP World Inland and Intermodal, you can benefit from greener, more sustainable rail or barge transportation for your newly assembled goods.
- Greater transparency
As global trade has reached almost every corner of the world, the supply chain has become a complicated and sometimes convoluted network with a myriad of partners. No retail giant of e-commerce stalwart can honestly say that they have oversight of their entire supply chain, and although new technologies are improving tracking and transparency it is still an opaque web of multiple actors. Bringing manufacturing to a port, where raw materials can be imported to and sorted, cuts out many of the actors in the traditional manufacturing supply chain.
Also, by importing raw materials and manufacturing in the same location, firms benefit from a single customs regime – something unheard of in a traditional supply chain. Not only does manufacturing at a port give you greater transparency over your supply chain, it also gives you a greater transparency of cost in terms of customs and wastage.
All the benefits outlined above show why ports are set to be the manufacturing hubs of the near future. But in order to integrate firms’ manufacturing base into a logistics hub, you need a partner that understands what specific businesses do and can help design and implement a robust logistics network, aiding firms find the optimum balance between cost, capital efficiency and customer service. DP World can do all three, and some.
WE WORK WITH OUR CUSTOMER SPEARHEADING THEIR DELIVERY PERFORMANCE
To see how DP World Europe and Russia can help improve your supply chain, please contact our Regional Commercial Director, Dirk van den Bosch by e-mail
firstname.lastname@example.org or on +44 7721 238159