What’s the SCOOP – Is Climate Change the Real Crisis?
For the last eighteen months I have used the word crisis in the first sentence of almost every article I have written. Before the pandemic ‘crisis’ we worried about the ‘crisis’ caused by the trade war between China and the US, and now we’re in a supply chain ‘crisis’ brought about by component shortages. But while we talk about all these challenges, are we missing the elephant in the room? Are we missing the biggest crisis of all time, the existential crisis that is climate change?
Climate change might be the biggest crisis facing humanity, and it could well be the biggest challenge facing the manufacturing industry this century. Let’s face it, the manufacturing sector that has developed and grown with little to no regard for its impact on the planet. Tomorrow I co-host episode three of our new hit series MADE IN EUROPE where I sit down with the great and the good of the European electronics scene to discuss the major issues they face in their business. My co-host tomorrow will be Dieter Weiss from in4ma, and an email he sent me yesterday got me thinking about this topic even more.
What’s more, I have been working recently with a disruptive and forward thinking company that mines the rare earth and other minerals used in high tech sectors. This company is thinking long and hard about the sustainability of the supply chain it participates in. And not just the extraction part, they are exploring the whole product life cycle. They have hired one of my favorite people in the industry, and my own personal go-to-guru, to shepherd them through the whole process and to really understand the positive impact they can have in creating a more sustainable manufacturing ecosystem.
Surely shorter supply chains are a good start
Whilst I think lofty ambitions are important, and we’ll definitely come to those later, surely much shorter supply chains would be a great start. In his piece entitled, “Made in France – A Manufacturing Renaissance”, ALL Circuits CEO Bruno Racault speaks of a manufacturing renaissance brought about by the desire of French consumers and French brands to buy and to build in France. This may be for all manner of reasons, from supply chain resilience and security to supporting a post pandemic economic recovery, but these shorter supply chains will doubtless deliver a sustainability dividend.
In Dieter’s email he asks, “why are we still ordering the goods needed in Western Europe from China? For cost reasons?” As is often the case with Dieter, he also provides an answer suggesting that, “all purchasing managers thinking that way have not done homework/their maths. China is not a low cost country anymore. Many parts of China (particularly the South) now have labour costs which are equal to or higher than some countries in Eastern Europe, such as Serbia, Romania and Moldavia.” And once you add in the spiralling cost of logistics the argument becomes even more compelling.
Dieter, as is so often the case, is right about supply chains – shorter just makes sense. Don’t get me wrong, I am not a luddite looking to overturn looms and turn back industrialization, but we may have gone too far with globalization and recent issues may well be pointing us back in the direction from whence we came. Many supply chains result in parts and products travelling the world several times before they finally reach the consumer. This is bad for the environment, and what’s more, might not be the most economical solution.
I’d suggest that recent disruptions, let’s not call them crises, might actually be an inflection point at which to ‘build back better’. Apologies President Biden for borrowing your slogan, but alongside fixing some of the current issues related to supply chain resilience and security, shorter supply chains might just be the way to tackle the real existential crisis facing mankind and manufacturing.
Bold ambitions for the future
I’d love to see some really big ideas and less chatter on the topic of sustainable manufacturing. Here’s a thought that I recently shared with a close friend of mine. What if we raised an industry fund of around $200Million to build the world’s most sustainable EMS facility? What if a few of the world’s larger OEM and EMS companies chipped in a few million dollars, and a killer team of manufacturing, automation, supply chain and sustainability veterans built a state-of-the-art facility that leverages the best of automation, autonomy, AI, ML, sustainable green energy, additive manufacturing and anything else we can think of to create a flagship model for the future of manufacturing? Wouldn’t that be worthwhile? Wouldn’t that give us a blueprint for the future of product design, manufacturing and fulfilment? Too far? I don’t think so!
An update on the last What’s the SCOOP, including poll results
Just as a footnote we talked about the current ‘top of mind’ disruption, namely component shortages in my recent ‘What’s the SCOOP’ article and responses continue to flood in. Check out the most recent addition, the thoughts of Upinder Singh of Virtex. The article inspired me to try LinkedIn’s new poll feature. I asked how long those in my network expected this disruption to last. Hundreds voted, with only 4% expecting an end in 2021, and only one third believing it will end in the first half of 2022. The remainder were split between 36% who suggest it will continue throughout 2022 and more than one quarter suggesting we will have to deal with it into 2023 and even beyond…
Like the trade war, the pandemic and the existential climate crisis, the current component shortage disruption can only be solved through open honest collaboration and a focus on the greater good.