Enter: adaptive production – shaping a new era of manufacturing in an uncertain world

Imagine a factory with teams of shopfloor workers bustling about, working in unison with robots and machines – supported by industrial AI agents. The machines handle dangerous activities, heavy lifting and tedious repetitive tasks, while humans focus on solving the difficult challenges. Data is flowing seamlessly between devices, systems, and people. It is constantly used to improve the production processes. Changes in demand or supply are identified immediately, and AI helps adjust the factory lines as well as its surrounding ecosystem just as fast.

Now, let’s be honest, this is a vision that is not yet realized everywhere: A manufacturing industry that is highly efficient, adaptive and sustainable while being customer-oriented and people-centric. At the same time it is becoming more and more important to reach this goal. In a world that is becoming increasingly uncertain, it is an ideal worth working towards.

Paradoxical times and rusty chains

We live in paradoxical times. While many countries worldwide are beginning to feel the hardships of an aging society, our global population continues to grow. Soon, there will be 10 billion people living on this planet. 10 billion people who want to live in the same prosperity the developed nations have long enjoyed. This creates a unique set of challenges for manufacturers who must balance the need for increased production with a diminishing talent pool. All while the replenishable resources of our planet are depleted faster every year, carbon emissions continue to grow and the need for a circular economy is becoming more evident than ever.

Wherever we go from here – whatever path global events take in the coming years – one thing is already certain: We are entering a new era of manufacturing.

On top of that, recent years have shown us the vulnerabilities in global supply chains that were the basis for globalization. The blockage of the Suez Canal, storms, floods and droughts that affected shipping routes, a pandemic and subsequent lockdowns that shocked the global economy and geopolitical turmoil and trade-conflicts with uncertain outcomes – the list of supply chain crises is getting longer and longer. Today supply chains can sometimes feel a bit like rusty chains strained nearly to breaking point – wildly different to the well-oiled drivetrain of the global economy we have grown accustomed to.

Uncertainty is growing across the global economy. Companies are asking themselves: How can we become resilient in uncertain times? The answer to this question is bigger than one single company. Wherever we go from here – whatever path global events take in the coming years – one thing is already certain: We are entering a new era of manufacturing.

Rethinking manufacturing in an uncertain world

We are moving from an era of globalized efficiency to one of politically managed interdependence. For industry, this means we must rethink manufacturing and adapt to new realities. And we must do so quickly. Global supply chains – long optimized for cost and scale – are being redefined by proximity, risk, and resilience. Relying on one single massive manufacturing hub is no longer viable in such an uncertain environment. Instead, we are moving towards a glocalized world: A world in which value chains are organized around flexible regional hubs, local capabilities, and digitally connected systems. A world in which we combine globally collected knowledge with local expertise for products that perfectly fit our customers’ needs.

Through a “local-for-local” approach we can build smarter, more efficient, more responsive systems. Bring production closer to demand. Reduce complexity and environmental impact.

Let's take a simple example and say you run an ice cream factory. You used to produce a million chocolate ice creams. Then one day, an influencer says: 'Cherry banana is the best.' Suddenly demand for that flavor skyrockets. And you? Instead of having to stick to existing production processes, you can quickly adapt to the changed demand.

Through a “local-for-local” approach we can build smarter, more efficient, more responsive systems. Bring production closer to demand. Reduce complexity and environmental impact. And increase adaptability and flexibility – not just to react to geopolitical change, but to customer needs, a dwindling workforce, energy realities, and evolving technologies. But this won’t happen on its own. To build factories, like the ones envisioned before, we need profound change in manufacturing. A change towards adaptive production.

Enter: adaptive production

Adaptive production builds on the automation capabilities we have today. The adoption of advanced technologies such as artificial intelligence, digital twins, software-defined automation and robotics brings flexibility and resilience into factories and enterprises. Soon highly automated and digitally connected factories will serve as interconnected nodes within a global network.

A sudden shift in demand from one specific area to another? An issue in global shipping routes that makes it difficult to get important parts needed to manufacture the final product? Through adaptive systems, that, for example, can download new or updated functionalities directly from the cloud, companies will be able to adjust production on the fly, reduce the dependency on long, fragile supply chains and mitigate risks associated with such global disruptions. And digital connectivity across the globe ensures that knowledge, best practices, and innovations are shared instantaneously across all locations, creating a robust and responsive manufacturing ecosystem, no matter how experienced the operators on the shopfloor are.

This is not a theory – it’s happening now. We are helping companies retool legacy facilities without disruption. We are supporting startups to launch production near customers within weeks. And yes, we are helping customers and partners build container-sized microfactories – production that moves with the market. And we are not only supporting our customers in becoming more adaptive. We follow this approach ourselves.

Digital Twins and other siblings

We build our factories twice. Before the excavators start working, we build the factory in the digital world. We use this digital twin – for example at our sites in Amberg or Chengdu – to constantly optimize production for efficiency and sustainability. Both factories are not only recognized as Sustainable Digital Lighthouse Factories by the World Economic Forum. We also call them “sister factories”. They share the same processes and are digitally connected. Our people and machines already work side by side, supported by AI-powered Copilots and flexible robots. So, when we see shifts in supply or changes in customer demands we can react and quickly adapt our production. Produce where we have the necessary supplies and as close to the customer as possible.

Industrial AI, Digital Twins, software-defined automation and robotics are the technological backbone of adaptive production. But making this shift is not just about technology. Fostering an open culture and a growth-mindset is just as important. Any transformation is driven – and made a success – by the people involved. They need to embrace technologies instead of fearing them. And we must support them on their growth journey and give them opportunities to evolve alongside the machines they are using. Enable and empower them to work with new technologies – for example through micro learnings they can consume directly at the workplace.

In the end, adaptive production isn’t just about speed or scale. It’s about giving companies the tools to produce what they need, where they need it, when they need it. It’s not just a shift in technology – but a shift in mindset. And we need to embrace it – to lead into the new era of manufacturing.

A modified version of this article was written for volume 2 of the CRISP Manufacturing book series, a framework for the manufacturing world. You can find volume 1 and a preview of volume 2 here.