Global developments increase need for local production with global coordinaton

Global conditions have changed drastically because of trade barriers, the Covid pandemic, logistics chaos and Russia’s invasion of Ukraine. Global trade chains have been significantly affected and companies across the world have become concerned after ­discovering how vulnerable their supply chains are.

More and more businesses are realizing these developments mean they need to change tack, not put all their eggs in one geographical basket and start manufacturing closer to their various markets.

Geographically limited suppliers

“Many companies in Europe and the US have used local suppliers in China, for example, to produce various types of consumer products,” says Patric Mattsson, Director of Marketing and Sales for the Integrated Solutions business area, who has extensive experience of business in China. “Manufacturing in China offers many advantages,” says Patric. “But the distances and time involved in shipping to the end markets where the products are sold is a negative factor, along with the fact that many local producers are geographically limited and not able to start production elsewhere in the world.” 

Need to diversify production

The need to split production up and combine China with manufacturing in other parts of the world has grown, and Nolato has recently received numerous inquiries from both new and existing customers who want to diversify their risk by manufacturing in different locations globally. “This is a perfect fit for us,” says Patric. 

“We’ve long taken an approach based on a smart combination of local and global. “We now have almost 30 of our own production units on three continents – Asia, Europe and North America. In addition, each of these units can handle customer needs from concept to production, while being based on the same core values and technology. “This makes it easy for our customers to manufacture locally in different locations simultaneously, while coordinating this ­production globally. “Not all units can do everything, but we have extensive experience of adapting our infrastructure and transferring know-how between our different units around the world.”

Environmental benefits

“Manufacturing close to your markets not only offers advantages in terms of risk diversification, but also provides environmental benefits, which is important today, with sustainability factors playing a key role in the success of products,” notes Patric Mattson.