The Rise of Microfactories

Is Industry 5.0 Destined to Be the Microfactory Revolution?

Image Source: Alfazet Chronicles/Stock.adobe.com; generated with AI

By JJ DeLisle for Mouser Electronics

Published April 12, 2024

For decades, the world of manufacturing has been driven primarily by the high-volume and low-mix mindset necessary to enhance efficiency and drive down costs. This has led to over half a century of offshoring to the cheapest markets possible and the world bearing the burden of massive global supply chains and transportation systems. In the 1990s, Japan's Mechanical Engineer Laboratory (MEL) introduced the microfactory concept, but the idea has largely rested on the shelf of the manufacturing mindset—until recently.

In the past few years, the idea of a microfactory has become increasingly accessible, and demand for the capabilities of microfactories has escalated significantly. There is now the technology, infrastructure, and market demand to build small and agile microfactories that can rapidly respond to customer requirements and customizations while maintaining low overhead, low footprint, and low impact (through sustainability measures and nearshoring).

Is this the coming of age of microfactories? This article explores the origins of the microfactory concept, discusses microfactory features, and posits the future of microfactories.

Beginnings of Microfactories

The origin of the microfactory concept is relatively straightforward. The MEL in Japan had an initiative to reduce the relative size, weight, footprint, and cost of traditional manufacturing equipment to achieve greater efficiency and modularity. These efforts led to a cellular and modular manufacturing machine format that is now relatively commonplace for rapid prototyping machines and compact fabrication systems. A critical feature of the cellular approach is that the automation systems allow for a workpiece or assembly to be moved freely among stations to meet the prediction customizations and features. This approach differs drastically from the highly linear production line approach typical in most mass manufacturing.

Aside from the physical nature of the manufacturing machines, the microfactory concept also embraces high-mix and low-volume tenets of yesteryear's artisans and craftspeople, who could deliver highly customized goods hyperlocally. However, the cost, footprint, and infrastructure needed to support many human laborers are cost-prohibitive and challenging due to labor regulations in many regions. Hence, the success of the microfactory concept hinges on the heavy use of automation, cloud infrastructure, intelligence, and connectivity to function profitably.

For decades, the microfactory concept has mostly been an innovative method of enabling rapid prototyping or in response to the critical needs of a customer that required a more compact, turnkey manufacturing node for a highly specialized product and didn't have the time or resources necessary to build out an entire traditional manufacturing system.

Now, with global trends toward sustainability, enterprises, industry, and consumers are all looking to lower carbon footprints and environmental impact associated with transportation and extensive industrial processes. Industry 5.0 emerges as one of the key drivers in this push toward sustainability, emphasizing the integration of human creativity with the efficiency of automation to achieve more environmentally friendly and socially responsible industrial operations. This is another substantial tenet of microfactories: reducing waste through greater efficiency from a holistic perspective. Having distributed manufacturing capability close to the source of the demand lowers transportation overhead and allows for faster delivery of goods to customers. Another take on this approach is that a microfactory can be located extremely close to the source of raw materials or the base goods necessary to manufacture a wide range of products, further reducing transportation overhead.

Microfactory Factors

Microfactories have several key factors that make the concept viable and add value to the manufacturing of goods:

• Small footprint and hyperlocality
• Automation, machine learning (ML), and artificial intelligence (AI)
• Connectivity and communications infrastructure
• Intelligence and data
• Responsiveness
• Low capital expense
• Ease of regulations and taxes

Small Footprint and Hyperlocality

By definition, microfactories have a small footprint to enhance efficiency and limit the overhead of interfacility materials and goods transportation. The small footprint argument of the microfactory concept means that these factories may be located where traditional manufacturing facilities cannot be built. This could be dictated by available real estate or local regulations limiting regional factory sizes.

A byproduct of the small footprint of a microfactory is that it may be placed hyperlocal to the origin of key raw materials/base goods or customer demand. With greater flexibility for factory placement comes the possibility of optimizing the microfactory's supply chain or delivery capability far greater than that of a traditional factory.

Automation, ML, and AI

Key to the microfactory concept are cellular manufacturing stations that can be rapidly reprogrammed or modularly configured to various fabrication and assembly requirements. Industrial robotics and automation have historically been very expensive, which is why most manufacturing systems have been based upon highly specialized linear and high-volume manufacturing equipment. Now available on the market are stationary robotic and autonomous mobile robotic (AMR) systems that can be rapidly programmed or changed to allow for a wide range of operational capabilities. With automated tool changes and modular tooling systems, many new automation systems can be configured to do the tasks of many dedicated fabrication systems. With ML/AI vision and handling systems becoming more accessible, it is now possible to use ML/AI robotics controllers to rapidly train a robot to perform a task based on human instruction, much like you would train a new technician, but in a fraction of the time and cost.

Automated manufacturing stations can also be much more compact than traditional manufacturing systems, as they don't require the same dedicated space for human operators and safety margins. It is also possible to use remote operators for automated equipment to further reduce the space and personnel needed for a given factory. With networked and cloud-based support infrastructure and sufficient automation, a remote operator can program and monitor several manufacturing stations simultaneously, possibly across several microfactories; that is, a highly skilled operator could help support several microfactories remotely. In contrast, typical manufacturing would require a similarly experienced operator available at each location.

Connectivity and Communications Infrastructure

For any remote operation or even automated coordination among machines and operators to occur, a highly capable communications infrastructure must be in place. This infrastructure must simultaneously handle the data exchange among every sensor, actuator, controller, robotic system, automated station, security, fire and safety system, and human operator, either local or remote. This is no easy feat and requires substantial communications and networking setups. However, this technology is much more readily available than in previous years, and there are now purpose-built wired and wireless communications systems available for manufacturing. Many prominent wireless standards have now incorporated machine-to-machine (M2M) communications protocols compatible with mesh networks to better support the Industrial Internet of Things (IIoT) and general IoT applications.

With new satellite connectivity options and internet services, it is now even possible to locate microfactories with reasonable data throughput requirements in remote areas that would have been inaccessible to internet connectivity years before. Now, satellite and cellular modules with relatively high data rates are compact enough and affordable enough to include in AMR and robotic systems themselves, further enabling microfactory connectivity on a cellular scale.

Intelligence and Data

The infrastructure for higher levels of automation proposed for microfactories means that there will likely be a huge amount of data generated by a microfactory. This data must be handled and stored properly for quality assurance and tracking, but it could also be a significant source of valuable insight used to further enhance the efficiency of various manufacturing processes. Some aspects of this data could even be packaged and sold as an intelligence product.

Responsiveness

With more modular manufacturing and fabrication systems, cellular manufacturing processes, and automation, a microfactory system could be rapidly reconfigured to adjust to customer or client demands. For example, the factory could continually manufacture goods and product lines in variations that sell well or provide rapid and on-demand manufacturing of goods directly ordered by customers; it could be completely reconfigured to manufacture new products as market opportunities occur, or it could produce goods in a wide range of volumes, from a single unit to thousands of units in a single order. Such agility and flexibility to customer needs, mixed with quick delivery and supply procurement enabled by hyperlocal facility placement, mean that a microfactory could respond to a market need or customer order in a small fraction of a traditional factory.

Low Capital Expense

The emphasis on automation and efficiency means that microfactory fabrication and manufacturing stations may be relatively high-cost items individually. However, these systems should be capable of fulfilling the requirements of several traditional manufacturing systems. Moreover, the entire concept of microfactories focuses on small and agile installations that should naturally have much lower capital expense than a conventional factory. Leveraging the microfactory concept could enable small businesses or startups to grow and scale naturally at limited capital expense by building microfactories near their customer base or materials supply as the business grows without having to bear the burden of high initial capital investment that often comes with high interest rate loans and lines of credit. Large factories tend to require large sums of borrowed money to purchase the necessary real estate and navigate location regulations even before constructing a facility, purchasing equipment, and setting up manufacturing lines. A microfactory-based business could avoid this by building out microfactories as it scales with available capital. This approach also minimizes the risk of investing capital in a dedicated manufacturing facility that can be rapidly pivoted as market forces change.

Ease of Regulations and Taxes

With the lessened requirements for footprint, machine quantity, power, and infrastructure compared to traditional factories, microfactories may be able to avoid some costly regulations and taxes in specific regions. Many of the laws and regulations in industrial districts and regions are explicitly designed for manufacturing facilities of a particular scale, and microfactories of specific small sizes may not be subject to the same laws, regulations, and even taxes.

The Microfactory Future

There is evidence that many trends in manufacturing and global trade are siding with the argument toward adding microfactories to the manufacturing mix. Microfactories are unlikely to replace traditional large-scale factories in the short term, as the economies of scale are still far beyond the efficiency gains of microfactory automation capabilities. However, microfactories may become key players in manufacturing certain high-mix type goods or fill in much-needed gaps in manufacturing capability for specific regions.