Manufacturing construction boom calls for modern networks
With global supply chains still in turmoil, brands have not only recognized the appeal of bringing production closer to home — many are looking to the strategy as a safeguard against further disruption. Anxious about the recurring waves of global uncertainty, CEOs have been highlighting plans to relocate production — using the buzzwords on-shoring, re-shoring or near-shoring — at a greater rate this year than they did in the first six months of the pandemic, according to a review of earnings call and conference presentations transcribed by Bloomberg. Compared to pre-pandemic periods, these references are up over 1,000%.
Brands weathering two years of logistics and production disruption are driving interest in on-shoring. Construction of US manufacturing facilities is currently experiencing a boom. Construction of new US factories skyrocketed over the past year, compared to the 10 percent gain on all building projects combined last year, according to Dodge Construction Network.
US manufacturers are making large investments in on-shoring. In fact, Richard Branch, Dodge Construction Network Chief Economist remarked, “When we look at manufacturing, construction in particular, over the last 12 months, the 12 months ending May 2022, manufacturing construction starts have totaled $41.6 billion. That's 161% more than the 12 months ending May 2021. And in terms of our dataset, that’s a record level of activity for manufacturing construction.”
Top 7 manufacturing sectors on-shoring
According to the National Institute of Standards and Technology, “Re-shoring manufacturing back to the United States has been top of mind for many manufacturers, especially in light of the supply chain issues brought on by the pandemic. Proximity to customers and markets, eco-system synergies and the impact on the domestic economy are all reasons why manufacturers want to move production back to the U.S.”
That agency notes that these are the industry’s leading the re-shoring/on-shoring trend:
- Transportation equipment
- Computer and electronic products
- Electrical equipment, appliances & components
- Chemicals
- Plastic and rubber products
- Medical equipment and supplies
- Apparel and textiles
Why modern manufacturing needs a modernized network
The existing factories in the US may be finding that their current infrastructure is not ideal for cost-effectively handling massive amounts of data, including complex supply chain management, digital twins, data storage, cloud computing, connected devices and robotics.
When building new facilities, they will need a scalable, ultra-high speed, high-bandwidth infrastructure solution that avoids legacy architectures and backhauling of traffic to a centralized data center. Further, they should be seeking to reduce traffic latency from the cloud to automation technologies due to network hops or congestion. They should be building diverse, resilient, secure infrastructure paths between geographically distributed facilities, cloud and data center environments.
Factories run on operational technology (OT); the applications and processes that control machines, robots, and other physical devices. The line between OT and IT is arbitrary, at best, as OT continues to advance in complexity, and the need for ever-higher bandwidth is necessarily influencing IT decision-making. Higher bandwidth and lower latency deliver great benefits to manufacturing firms. Low latency is a critical need, as industrial applications frequently require response times of less than 1 millisecond.
One thing to be mindful of is that as OT and IT are converging, the OT environment is no longer protected by the historical air gap, which had previously stymied hacking attempts by outsiders. This has led to industrial control systems becoming vulnerable to cybercriminals accessing them through the IT network side, and the opportunities for malicious attacks that the cloud can represent — unless, of course, the network infrastructure has built-in security.
With increased scrutiny on supply chains and workflows, modern manufacturers simply cannot afford to be offline or suffer downtimes. Yet, cybercriminals have traditionally targeted manufacturers, as cybercriminals bet that disruption of manufacturing operations, and their supply chains, would pressure companies into paying ransoms.
Ever-increasing and evolving cybersecurity threats call for an equally evolved security response. A modernized network can provide secure, safe and scalable access to all available data points in a given manufacturer’s infrastructure, and it should be multi-cloud ready and meet optimized, complex routing requirements. To allay security concerns, a manufacturer’s network infrastructure should have built-in next-generation firewalls, deep packet inspection, threat intelligence, URL filtering, DNS protection, and intrusion prevention system (IPS) network security tools. In addition, it should have anti-malware — protection and should automatically keep pace with the latest security policies to protect the network and its perimeter. Fortunately, network infrastructure exists today that checks all those boxes.
Pressure to lower total cost of ownership and maximize IT resources
Manufacturers are investigating on-shoring to solve supply chain challenges and reduce costs. In today’s environment, this will mean increasing their use of bandwidth-intensive technologies such as the cloud, collaboration software, automation, IoT and machine learning. Larger manufacturers now support more remote workers, and network managers must adapt and evolve infrastructure to meet current network needs — all of which points to the need for ultra high-speed data solutions.
Ensuring a fast and secure path to the cloud and other mission-critical applications for all users is paramount, and network managers are now tasked with shifting limited IT resources from the maintenance of legacy systems and infrastructure to new, ongoing, digital initiatives. To accomplish all these varied goals, already overworked IT teams need to reduce network and administrative complexity and cost without impacting performance and uptime. This can be achieved through the adoption of a self-managed, co-managed, or fully managed modernized network.
The correct network partner for manufacturers should be able to help them reduce network operating costs by tailoring to specific connectivity and bandwidth needs, as well as moving select WAN traffic away from private networks and onto public networks. Further, they should be able to make network management easier with a complete solution that includes design, connectivity, configuration, equipment, installation and ongoing support for all locations nationwide, 24/7/365.
Learn more about Spectrum Enterprise network infrastructure solutions
Solutions exist today that offer scalable, resilient, managed or co-managed network infrastructures that deliver the bandwidth, cloud access and routing efficiencies that modern manufacturers need to build or transform production environments and protect against disruption. Some of these solutions simplify the management of multi-site, multi-cloud and data center networking that underpin a given manufacturer’s technology investments.
Manufacturers can partner with Spectrum Enterprise for the modern network infrastructures they need in your new factories — whether they’re building a brand new facility or simply modernizing an existing one.
Learn more about modernized network infrastructure from Spectrum Enterprise.
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