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e-shoring from a supply chain perspective

Technology assisting manufacturers looking to re-shore their operations to Australia. 

By implementing asset tracking technologies, manufacturers can deliver more accurate and timely information.
There are several contributing factors why Australian manufacturers are looking to re-shore part, or all, of their production onto home soil or a base closer to home.
The once very attractive wage rates in the regions that were targeted for outsourcing like China have begun to rise. 

While this is advantageous for countries exporting to those regions as the consumer buying power has increased, it is making the cost of outsourcing operations to those regions rise. 
Coupling this with the perceived –and in some cases real drop in quality of goods produced – makes it attractive to bring these operations back closer to home.

Another factor driving the growth in re-shoring is the instability and political upheavals plus natural disasters that have plagued some of the growth regions targeted for past outsourcing in South-East Asia and caused major disruptions of manufacturing processes and global supply networks. 
In the majority of cases, when an Australian business offshores their production capabilities, they do so from an infrastructure standpoint and lose their facility’s systems and highly trained personnel over time. 

Therefore a key challenge for any Australian business looking to re-shore is how they overcome this lack of infrastructure and trained personnel to fulfil their manufacturing orders locally. 
While some businesses will re-invest with a longer term view to re-establishing a highly skilled manufacturing operation locally, many will look at the short-term challenges and consider the costs of re-shoring to be too high.  

Technology can assist
As a key challenge for manufacturers looking to re-shore their operations to Australia is a lack of specialist trained personnel in the production process, local businesses should look towards automated technologies where possible to help plug a skills gap and improve overall operations.
By implementing asset tracking technologies like handheld computers in a manufacturing facility, businesses can deliver more accurate and timely information to limit equipment downtime and expedite repair order applications. 

For instance when a repair order comes in, equipment repair specialists can use a handheld computer to obtain a task detail showing the exact location of relevant parts and assets among the thousands that exist in a large manufacturing setting. 

As the specialist picks a replacement item or puts something in to be repaired, they scan its bar code with the integrated scanner on the mobile computer. 
The program immediately subtracts the item from its inventory count, eliminating time workers waste looking for an unusable piece of equipment. 
When a replacement is issued or an item returns from repair, the specialist sends a task update through the mobile computer to the project manager which automatically updates the system. 
While these improvements may seem marginal in single instances, by making the small processes which happen regularly leaner, significant improvements can be gained. 
Imagine that each time a worker is looking for a piece of equipment that is in fact in for repairs, it wastes 10 minutes. Multiply that by the many times that it happens daily, by the number of workers and there are significant gains, reducing the cost to the operation and the consumer and making the re-shoring process more viable over the long term.

RFID technologies can also assist manufacturers looking to improve their re-shored operations. 
For example, a large Middle Eastern plastics manufacturer recently started using RFID in a new facility in an innovative way.
The company moves very large volumes of pallets of plastic and different types of material around their yards in tanker trucks. 
They do this in order to maintain inventory levels and ensure they are taking the stored plastics to the right areas for unloading into the hopper bins. 

The company is actually using RFID trailer tags that will identify (because of the technologies read-write capabilities) what’s in that tanker. 
When that tanker backs into a loading door, RFID enabled gates provide instant visibility over what is in the trailer, if it is the correct trailer and whether the contents are the correct blend for the specific production process. 

Distribution implications
When manufacturers go through a process of re-shoring they not only need to consider the implications to their business in relation to re-establishing their local production facilities, but they also need to consider how they will best set-up their distribution processes. 
Manufacturers looking to establish a new distribution network following a process of re-shoring need to engage logistics providers that have the right technology in place to support international traceability protocols, especially in relation to any food based production. 

Logistics partners need to have software systems in place that are capable of managing the receipt of manufactured goods, the handling of the storage aspect on an ongoing basis, as well as the outbound shipping capability to make sure that the product goes to the correct customers that are ordering it, in the correct manner and in the correct conditions. 

[Bruce Stubbs is Industry Marketing Director with Honeywell Scanning & Mobility]


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