The industrial landscape after the pandemic is going to see tremendous changes. One of the key driver of this change is because of the supply chain disruption that results from the lockdowns and travel restrictions.
Companies in the advanced economies will work toward moving their production and supply chain back to their own countries, for two reasons. Firstly, travelling will get harder and it is easier to manage the entire production within the borders. Secondly, economic damage from the pandemic will prompt countries to push for jobs to be brought back home. The trend of deglobalization will persist for several years at least.
However, with “re-shoring” rather than off-shoring happening, it means that these manufacturing companies will have to move up the production efficiency using technology in order to compensate for the higher labour cost and other cost of operating on-shore.
Advanced manufacturing has been on the agenda of many advanced economies, as the means to achieve higher productivity and also flexibility in manufacturing capabilities. This means investing into a manufacturing capability that embraces Industrial Internet of Things, Additive Manufacturing, Data Analytics, Artificial Intelligence, Cloud Computing, and many others.
With the pandemic, the full glory of Industrial Revolution 4.0 will be revealed. Re-shoring does not mean that the old jobs will come back. It is important to train the workforce to be ready for this arrival. And we are already late, but it is better late than never.