Is Industry 4.0 creating a downfall for the “cheaper production” slogan?

With the rise of digitalization and the evolution of the automation world, customers are focusing more on the quality level of products than just the quantity. The countries with cheaper values of their production line were selling their products with the slogan tag of availability of area at a cheaper or economical price. However, the way digitalization led to the rise of the economy and the demand around the globe is changing every time.

The low-cost nations are somehow losing the battle of being the first choice for any new manufacturing or production facilities. The decision-makers are looking for a location at the main center so that speedy delivery and more in contact with the customers or among the customers can be increased. Some like-minded thoughts shared are by companies like Adidas ‘Speed Factory’ in Germany and Atlanta. A complete autonomous machine tool production facility in Japan or full digitized workshops by the local motors for manufacturing customized cars in the US.

Any investors, business owners, or manufacturers would like to save the early pennies surrounding the investment made on localizing their production facilities, but the growing competition and mass customization have increased the demand of having a conversation with the customers more and focus on the buyer and consumer relationships more where the company can leave their mark on their consumer segments in terms of gaining their trust and loyalty for quality and faster supply as per their demands.

Digitalization involved customers engaging with their likes and dislikes, thereby letting the manufacturers know which product is on-demand and letting them understand the demand and the current trend of the consumer or the generations and what way they can get influenced, or they can influence in selling other products on the similar variants being accepted already the consumer.

Usually, once you have made a presence like Apple or Tesla, the name itself sells the product among the consumer as they would like to try out the new products before it becomes outdated, but for any new venture cheaper production locations still is in demand, but nobody can rely on such patterns. It is thereby highly possible that cheaper location areas may lose their charms to attract manufacture to invest in their zone until and unless they focus on uprooting and leveling up their zone as to the demanding centres.

In my opinion, it might somehow balance out the competition and preserve the demand of attracting new manufacturing plants.

Source:- Statista.

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