How Digital Manufacturing Drives Reshoring
The United States has lately doubled down on trade embargos and legislation aimed at reshoring tech manufacturing from overseas. But as far back as 2013, an electronics manufacturing services (EMS) provider envisioned another way to reshore: a cloud-based manufacturing platform that delivers product designs directly to more than 100 Americas-based factories. MacroFab’s Misha Govshteyn “The way that our service works is that it’s digital first,” explained Misha Govshteyn, CEO of the cloud-based platform MacroFab . “A lot of our customers find us initially through engineers, who upload product designs and BOMs to get price points and turnaround times. Our initial customer engagement starts with us building small number of units. But the fastest-growing portion of our business is when those designs go into production.” After three years of unprecedented supply chain disruption, manufacturers are looking for ways to ensure business continuity, produce closer to their end-markets and save costs. Even before the Covid-19 pandemic hit, countries were moving toward protectionism. Digital innovation has reduced the importance of matters such as labor costs in determining where products are manufactured, and businesses are seeking to reduce their dependence on overseas providers. “We’re starting to see an increasing number of European companies engage with us,” said Govshteyn. “They’re hearing from a lot of their customers that they prefer [local or regional manufacturing] for products sold in North America. We’ve already been in discussions with some companies in Taiwan because they’re hearing the same thing. Businesses don’t want to be stuck with without a continuity plan.” Reshoring and near-shoring trends The trend toward reshoring or near-shoring is on the rise. The Reshoring Initiative , which tracks the number of manufacturing job announcements in the U.S., forecast 350,000 announcements in 2022, up from 255,000 in 2021. “New investments in U.S. manufacturing by domestic and foreign companies briefly slowed their historic pace in the second quarter, perhaps in reaction to steep inflation, but quickly regained ground in Q3 after President Biden’s Inflation Reduction Act and Chips and Science Act were passed,” it noted. Manufacturing-as-a-service isn’t new – that’s what EMS providers do — but digitization has enhanced the flexibility and efficiency of outsourcing. MacroFab’s cloud-based model enables customers to upload designs and component selection, obtain quotes, place orders and follow progress toward delivery. Product capability ranges from printed circuit boards (PCB) to fully assembled and packaged electronics products. PCB prototyping is the company’s core business and customers are increasingly moving toward volume production, Govshteyn said. MacroFab’s historic revenue CAGR is 127 percent, he noted. Its volume production business was up by 275 percent in 2022. MacroFab’s platform also connects demand and supply in real time, which reduces time-to-market and time-to-scale. Companies are also better able to respond to changes in global trade and geopolitics and gain better visibility into their supply chains. Source: MacroFab “If you talk to engineers these days, the common complaint is parts are always unavailable,” Govshteyn noted, so MacroFab is always prepared for substitutions. Its two main facilities, in Houston and Guadalajara, manage the routing of materials, delivery to end-users and warehousing. “We are handling more and more production jobs for some of the world’s largest brands,” he added. The global digital manufacturing market – defined as “an integrated approach to manufacture or construct products using a computer system” — is projected to reach $1,370.3 billion by 2030 — from $275.6 billion in 2020 — at a CAGR of 16.5 percent from 2021 to 2030, according to Allied Research . How digitized are we? Market experts agree that the Covid-19 pandemic has accelerated the adoption digital manufacturing but there’s little data on to what extent it’s taken hold in the electronics industry. Still, the ability to shift production from one region to another is an element of the resilience toward which the electronics supply chain strives. “Thanks to a combination of the pandemic, trade wars and tariffs, and ongoing supply supply chain disruptions, American companies are getting more serious about bringing manufacturing closer to the U.S. market,” according to the Kearney research firm. “Customers say they are going with us because they want access to manufacturing capacity quickly and because we have a digital platform to manage the manufacturing workload,” Govshteyn noted. MacroFab in January secured $42 million in new growth capital from BMW i Ventures, Edison Partners and ATX Venture Partners. With this round of financing MacroFab has raised a total of $82 million, enabling the company’s growth amid the transformation of global supply chains. The company has doubled its […]
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