How automation, international trade conflicts and COVID-19 are changing production networks and the

The success factors of international production networks – global access to low-cost production sites, overcoming transport and communication barriers, as well as a relaxation of limits to trade – are gradually becoming less and less important. Increasing automation, for example, is perpetually equalizing the cost potential in low-wage countries, whereas the availability of skilled workers in developed countries is decreasing. Simmering trade disputes between the U.S. and China bring the issue of trade barriers back into focus. And finally, the Corona crisis impressively proves to the economic world that global mobility, which is taken for granted, can come to a halt almost instantly. This also has a significant impact on regions not directly affected by the pandemic.

So far, the main objective of the internationalization strategy was to reduce costs through low wages. However, as automation offers new opportunities to increase cost efficiency, the issue of resilience, i.e. the resilience of production networks, comes to the fore.

New production networks: Reducing operating costs, increasing delivery performance and stability

Despite of its high relevance to the current situation, we see due to the cooperation with our clients worldwide that this important issue is only approached hesitantly. Decisions about the production footprint are always location decisions, too – and therefore highly political. The possible alternatives are usually complex, which unsettles companies and prevents decisive action.

At this point, ConMoto supports you with decades of experience in the evaluation and redesign of production networks. We have validated our consulting approach in numerous international client projects. In addition to lowering operating costs in the double-digit percentage range, our customers also benefit from increases in delivery performance, stability and innovative capacity.

During the assessment phase, we pay special attention to the individual strategic orientation of companies by including not only internal factors, but also economic and political framework conditions. ConMoto consultants analyze production networks using transparent benchmarks. We evaluate longstanding criteria such as site costs, product allocations, production capacities and competencies/technologies. In addition, we scrutinize basic decisions such as make-or-buy or core/non-core and compare them with new strategies of insourcing.

Based on the assessment results, we develop the design of your future production network, resulting in realistic options for long-term, often costly changes to the production footprint. The goal is to find an optimum that reconciles company-specific strategic needs with objective success factors such as cost efficiency, quality, flexibility, customer proximity and automation at reasonable investment costs.

ConMoto tackles the implementation: Redesigning processes, organization, technologies

We also advise you regarding the detailed planning and implementation of your future footprint. We design your processes, organization and technologies to make them innovative, robust and as independent as possible from external influences. During the implementation phase, ConMoto is actively involved: both operationally and administratively. We measure progress according to realistic implementation plans, detect deviations early and adjust quickly. Our extensive industrial experience and implementation strength sustainably ensure the success of the project – at management and shop floor level alike.