Why the microfactory is the next ‘big’ thing for manufacturing

Traditional manufacturers have been weak in adapting to digital transformation, could microfactories change that?
22 September 2020
  • Microfactories are small-to-medium scale, highly automated, and technologically advanced manufacturing setup
  • A microfactory requires less energy, less material, and a small labor force due to high-tech automated processes
  • Electric commercial vehicle maker Arrival begins production of 1,000 fully automated microfactories to operate by 2026

As with many businesses throughout the pandemic, manufacturing has had to adapt to the circumstances.

Larger projects have been scaled back while supply chains have been heavily disrupted, but the industry has been quick on its feet in adopting next-gen technologies.

Despite manufacturer enthusiasm for spending on state-of-the-art automation tech, however, the sector is still falling behind when it comes to digital transformation.

Enter the microfactory. Considered the next ‘big’ thing in manufacturing, a microfactory is a small-to-medium scale, highly automated, technologically-advanced manufacturing setup possessing a wide range of processes.

Since the development of the first microfactory concept first proposed in 1990 by the Mechanical Engineer Laboratory (MEL) of Japan, there have been several applications in commercial manufacturing processes.

It was not until the noughties, however, that manufacturing technologies such as 3D printing enabled microfactories to be used in commercial production.

In 2010, Phoenix, Arizona-based Local Motors established its first microfactory for commercial operations to manufacture its Rally Fighter Car and is one of the pioneers in establishing a microfactory for automotive production.

Since then, the last five years have seen the concept of microfactories accelerate, with a few different players and start-ups challenging traditional manufacturing models. Leading application industries currently using microfactories for commercial production include automotive, consumer appliances, garment, and electronic waste treatment.

Elsewhere, there has been an uptake in investments in the development of new advanced technologies required for establishing microfactories.

Companies like Bright Machines have made it easier for manufacturers of all sizes to procure and deploy next-generation factory automation. Introduced in June 2019, Bright Machines Microfactories combine adaptive robots, machine learning, and computer vision to provide a modern, software-defined approach to assembly automation.

The firm — which essentially offers ‘factories-as-a-service’ to help customers “become less reliant on manual processes and better prepared for the next disruption” — has aimed to democratize how products are manufactured to enable anyone from anywhere to get something made efficiently and cost-effectively.

Bright Machines’ CEO, Amar Hanspal said, “while some manufacturers prefer the traditional model of buying expensive hardware, Bright Machines offers a more inclusive service which combines hardware and intelligent software without high capital costs, putting factory automation within the reach of even more manufacturers.”

The microfactory has arrived

In wake of the COVID-19 crisis, the quietly ambitious UK-based electric vehicle maker Arrival has grand plans to introduce 1,000 fully-automated microfactories with local supply chains by 2026.

The company — which has already accepted a EUR100 million investment from Hyundai-Kia, and hundreds of millions of euros worth of bespoke purpose electric vehicles from UPS — is said to be building its infrastructure from the ground up with small fully automated factories powered by industry 4.0 technology in the belief that larger traditional manufacturers are less agile.

UPS is one of the firms Arrival has already worked with

A concept image for one of Arrival’s vans. Source: Arrival

CEO of Arrival’s components division Elements, Tracey Yi said, “with big established OEMs [Original Equipment Manufacturer], it’s like turning the Titanic.”

Arrival hopes to take full advantage of its nimbleness using industry 4.0 technology from the get-go, and aims to eventually build its vehicles exclusively using robots.

“Everybody wants industry 4.0, everybody wants warehousing automation. You might have the odd robot, but why does virtually nobody truly have it? It’s because you cannot press a pause button and stop all orders without losing customers, and then find all the money to reinvest to get yourself to 4.0,” added Yi.

Arrival’s strategy is in a clear response to the market following the pandemic, where larger OEMs have simply been unable to pivot successfully. Yi went on to explain their advantage over large inefficient factories that need to run at full capacity.

Arrival’s microfactories, in contrast, are quick to build and will have a small 10,000 square-meter footprint for the final assembly.

“We can take typical warehousing space, we don’t have to dig down and create pits […] and we can build them near the city centers very near to the customer base,” added Yi.

Localized autonomy

Traditional manufacturing backs reducing costs by building large factories to achieve economies of scale and mass production. This means it needs an extensive and costly distribution network to make products available to customers.

A microfactory on the other hand challenges this concept by setting up multiple small, high-tech manufacturing units near customers, which can also function as retail outlets providing a customized product.

It’s apparent the transition to smaller, agile, and highly automated microfactories is not so far in the distant future. Due to their capabilities of providing a high variety of low volume customized products with a high return on investment, experts believe manufacturing technology is well on its way to embracing the microfactory concept, and that we could see several new microfactories over the next 10 years being developed.

The full benefits of microfactories, however, have yet to be realized. Shifting industries from tried and tested Henry Ford methods to smaller production facilities is going to be a momentous challenge.

What’s more, most products manufactured in large factories are presently located in low-cost regions like Asia, Eastern Europe, and South America. This has usually helped customers get products at a better price but this could be about to change due to labor being exhausted, labor being up-skilled, or increased costs. In addition to this, personalization and customization seem to be more important for customers today than it has ever been.

Consumer dynamics and limitations to products sourced from low-cost countries aside, it will be vital for large organizations to rethink manufacturing strategies following the fall out from COVID-19.

By opening multiple manufacturing operations distributed in different areas, organizations will help manufacturers produce customized products suitable for local tastes, while also saving logistics and transportation costs.

With younger technologically advanced organizations already making moves in establishing microfactories, it could very well be an actual solution to a possible new wave of global protectionism.