Shipborne manufacturing: augmenting flexible supply chains and accommodating fluctuations in demand

Let’s consider mobile factories – an idea I have been thinking about for nearly 20 years, as many of my long suffering friends can attest… 

Possibly the most recognizable example of a mobile factory would be the huge, Russian and Asian factory fishing ships. These monsters catch enormous amounts of fish and, after ingestion into the vessel, clean, process and package the seafood into a form that is ready to be shipped directly to retail outlets.

Even if we leave aside the issues of the sustainability of these methods, there is no question that it is a very efficient means of transforming raw materials into consumer ready product in one go. It’s a very similar model to that used by Henry Ford when he built the River Rouge production plant in the 1920’s. Raw materials in one end, finished cars out of the other.

But it wasn’t mobile, so as the economic environment around it changed over time, it was unable to move elsewhere. It and its related supply chains were locked in…

The industrial manufacturing models of the past are gradually being eroded or evolved into more modular and flexible pieces. The vertically integrated facilities such as River Rouge are very few and far between. With the move towards build to order, low inventory and just in time production models, the emphasis is on flexibility and agility. In the apparel industry, the Zara brand has successfully established a manufacturing model that thrives on change and low production runs. They are also able to support high volume production runs if the market demands it, but they do not have to choose between them, as they can do either.

The Zara model is one that a number of other manufacturers are exploiting. This will be aided by the changes in manufacturing technologies heralded by the advances in 3D printing, along with the new materials and compounds being developed.

It is therefore quite likely that a factory of the future will have a very small physical footprint, but be full of very flexible manufacturing machinery. The delivery of raw materials and the shipping of finished products will be a seamless flow, determined by demand. This is potentially very good news for depressed areas that could establish themselves as manufacturing locations, possibly reversing the effects of the migrations into larger cities instigated by the industrial revolution.

While we’re still imagining this future vision, why not extend this model into another sphere of true mobility. Shipborne mobile factories. In other words, why not mimic the factory ship model I mentioned previously. In the oil and gas industry there are numerous examples of using huge vessels to capture, process and store hydrocarbons offshore. Given the slump in the global shipping sector and the over capacity of container shipping, the time may now be right to explore this notion.

It would be possible to move a shipborne manufacturing plant to almost any region in the world, drop anchor and start producing whatever may be required. So long as there were appropriate mechanisms to replenish any materials that were necessary for the manufacturing process and off-load the finished products into the local market, it could operate as required. It would avoid the usual planning/zoning requirements and would considerably reduce the amount of time needed to get production up and running.

This model would help to augment any disaster recovery efforts if the disaster is close to the sea.

The key for the model has to be the related supply chains that both replenish the factory ship and also move the finished products to their intended marketplace. I imagine something analogous to the manner in which feed vessels support container flows from smaller regional ports into the megaports served by the largest container ships.

As the demand for greater manufacturing flexibility and the enduring lack of infrastructure in many parts of the developing world continue, this would seem to be a model that should be considered. Otherwise we will be left waiting for the next upturn in the shipping cycle to absorb the chronic overcapacity in the market.

More insight?

Source: Transport Intelligence, July 12, 2016

Author: Ken Lyon