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Two key trends are driving the need for global manufacturing networks: the rise of the on-demand economy and a cross-industry paradigm shift toward global markets. The on-demand economy necessitates that companies optimize their supply chains for rapid fulfillment and delivery. It’s no longer enough to guarantee high-quality customer service and low shipping costs; the modern consumer demands a broader selection of products combined with free one- or two-day shipping.
This pressure is compounded by the astronomical growth of global markets. By 2025, global consumption is expected to reach $62 trillion and the consuming class — defined as people who have disposable incomes of at least $10 a day — will account for more than half of the world’s population. Established local markets are buckling under the on-demand economy, as consumers demand specialized products and services. For many consumer goods companies, retailers, and manufacturers, remaining financially viable means thinking — and operating — globally.
The benefits of a global manufacturing network
A global manufacturing or production network refers to the interconnected functions, operations, and transactions needed to bring a product from prototyping to final delivery. It’s closely related to complex supply chain management and well-suited for the on-demand manufacturing model.
Manufacturers don’t have to build their own global manufacturing network from scratch — they can still reap all of the benefits by finding a partner they can tap into. Here are the top three benefits of using a manufacturing partner that has a global manufacturing network.
1. Reduce production costs
The primary reason manufacturing companies take production overseas is to reduce overhead, production, and tooling costs. For example, while raw materials cost about the same in China as they do anywhere else in the world, manufacturers can offset material costs with China’s comparatively low labor costs. Business models in some foreign markets are more reliant on the volume of production than the cost of tooling; by making products in these markets, manufacturers can save significantly on tooling, which is typically one of the highest costs in any project.
2. Easily adapt to change
Consumption patterns evolve rapidly in an on-demand economy and unanticipated global events like COVID-19 can make negotiating supply chains and fluctuating market conditions even more challenging. Traditional manufacturing models are only effective for high-quantity orders–as volume increases, cost-per-part decreases. Also, in the midst of uncertain conditions, manufacturers struggle to effectively forecast demand, which leads to over or under production.
A global manufacturing network allows manufacturers to quickly pivot based on shifting needs and avoid costly guesswork. A diversified manufacturing network fortifies operations. Since resources are not centralized, an unanticipated change in one market or one part of the supply chain will not necessarily disrupt the whole system. With a distributed network, manufacturers can adapt more easily, provide high-quality products at lower costs, and meet their service-level requirements for lead times even in the face of unprecedented change.
3. Stay focused on innovation
When companies distribute manufacturing operations to partners with global networks, they free up resources to expand their businesses. International branches or third parties can handle critical responsibilities such as quality control while the regional branch of the network can focus on product development, marketing, and business development.
When product teams partner with a full-service manufacturing company like Fast Radius, they streamline the product development life cycle because they need only manage one relationship (rather than an entire network of vendors). The manufacturing partner shoulders the multitude of challenges that come with doing business internationally.
By delegating key aspects of manufacturing and supply chain management to trusted partners, product teams have more free time to innovate. Furthermore, expanding abroad grants a company access to new technologies, new processes, and new streams of revenue.
Go global with Fast Radius
Companies with global manufacturing networks are well-positioned to meet the demands of today’s on-demand economy. Overseas networks empower manufacturers to increase agility, boost productivity, reduce costs, and meet the challenges posed by a rapidly changing landscape.
At Fast Radius, we have our finger on the pulse on what’s next in manufacturing because we have a constantly expanding global network at our disposal. We’re committed to producing high-quality parts at a competitive price, whether that’s in our additive factories in the United States or with one of our global partners. When you partner with us, our manufacturing network is your manufacturing network — you’ll have full access to the latest manufacturing capabilities across the globe. Contact us today to learn more.
Find more manufacturing industry insights in the Fast Radius resource center.