Dark factories, bright investment opportunities

Flexibility and resilience will be the main focus. “It will be important for companies to be able to easily replicate production setups in various regions. This means being able to set up the same factory – with the same processes – in Europe, Asia and North America”, Franck continues.

This replicability offers several advantages:

• Fast scalability: allows companies to quickly respond to local demand.
• Risk diversification: minimises the impact of issues in one region – political instability and natural disasters, for example – on overall production.
• Consistent quality: standardised processes ensure uniform output, across all locations.
• Customer proximity: has a direct impact on transport costs. 
  

While the advantages are clear, setting up multiple production sites is no easy feat. Companies are faced with several challenges. The high initial investment costs for one: building a new factory is expensive. Plus, not every region has sufficient or sufficiently skilled workers. Add to that the complex supply chains. And not to mention the differences in legislation, work rules and business practices.

“President Trump would like to see iPhones made in America instead of China. But that’s easier said than done. Apple has been one of the largest foreign investors in China for years and would obviously rather benefit from these investments than make new ones”, Franck points out. “However, advances in production technologies – such as automation, the Internet of Things (IoT), robotics and artificial intelligence (AI) – are likely to gradually facilitate the relocation of these production facilities and make them more economically viable in the coming years.”

These advances are leading to the rise of dark factories. “Dark factories are fully automated, lights-out facilities that operate around the clock with minimal or even zero human intervention”, Franck explains. “Automated factories can be up and running faster than traditional ones. And robots deliver consistent quality, whatever the location.”

The rise of lights-out facilities naturally also has an impact on the labour market. In regions where labour is expensive or scarce, these factories are an attractive alternative – in Western Europe or the US, for example, where wages are high. Thorough automation will give production a renewed competitive edge in these regions. And while some jobs will disappear, new ones will emerge: data analysts, AI engineers, robot maintenance technicians, and so on.

Japanese robotics firm FANUC pioneered the concept of the dark factory in as early as 2001”, says Franck. “But China recently took the lead in scaling up dark factories. A decade ago, China unveiled its ‘Made in China 2025’ strategy, and has made considerable investments in robotics. Moreover, 2025 is just one milestone within China’s ambition to become a high-tech manufacturing superpower by 2049.”