Swedish companies bring production back home

After many years of outsourcing production to low-wage countries, industrial companies in Sweden are reversing the trend. Two influential factors are thought to be the recent advances in automation and the rising cost of labor in low-wage countries.

Until recently, outsourcing was popular among Swedish industrial companies. The low cost of labor in Asian countries was appealing and companies realized that they could lower their production costs significantly. Today things are different. Thanks to advances in automation, companies can reduce their costs while increasing their production rate.


From a gold mine to a waste of resources

At the peak of the outsourcing trend, the focus was on cutting costs, says Ari Kesti from SVIA, manufacturers of robotic cells. According to Ari, companies realized that there was big money to be saved, though there were some concerns about quality levels.

– Today, quality is no longer an issue when comparing production in low-wage countries with production in Sweden. They have the exact same quality control and standards of quality in Asia as we do, Ari says.

What many Asian manufacturers often lack is resource planning. Ari spends a lot of time in Asian factories and has noticed that processing machines may stand still for long periods of time. Coupled with inefficient staff, this can be costly:

– It’s been shown that human beings are only 50 percent effective at work. In addition, the cost of labor has soared in recent years, Ari notes.


Manufacturing is now cheaper in Sweden

As a consequence, companies are now moving production back to Sweden. Here, advanced production technology using high-tech automation does away with the need for staff. Ari continues:

– We have now reached a point where manufacturing is cheaper in Sweden than in Asian low-wage countries. And instead of using several different standalone machine tools, as is done in low-wage factories, we use multitasking machines.

Machine utilization rates in Sweden are considerably higher than in Asia. Used together, multitasking machines and robotic cells efficiently produce components, with a utilization rate of up to 95 percent.

– The future looks bright for Swedish companies that recognize the potential and possibilities of automation. Companies that are prepared to invest in technology can reduce their costs while increasing their rate of production, Ari says.


Robot manufacturing predicted to quadruple

Ari says that SVIA has chosen to specialize in the automation of CNC machines. With a presence in Europe, North America and Asia, SVIA aims to help industrial manufacturers streamline their production:

– The International Federation of Robotics, IFR, predicts that production using robots will quadruple within 3-4 years, indicating that even more companies will automate. Husqvarna Group is one well-known company that has recently started to move production back home because of automation.



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