siliconindia | | January 20209As the overall manufacturing sup-ply chain becomes more automated and sophisticated, it is becoming criti-cal for producers to understand how current technological trends affect their respective industries. Adopting I4 manufacturing methods will re-quire significant enhancements to ex-isting information technology (IT) in-frastructure for many businesses. It is imperative for producers/manufactur-ers to take proactive measures to stay relevant and competitive in this every changing environment. The objec-tive should not be simply to upgrade IT systems to the latest and greatest, but rather to understand how data and digitization will transform the de-sign, production, sale and delivery of their goods.What Does This Mean for Real Estate?I4 will create an integrated value chain and drive robust demand for custom-ized and modular facilities, which are able to accommodate a wide range of processes and uses.The onset of I4 will shape deci-sions around building location, func-tion and fit-out as occupiers select properties best suited to this new era of manufacturing and distribution, and developers & investors strive to en-sure their buildings remain in demand.Location: The digitalization of pro-duction will require that all buildings be connected and networked. Hence, properties will need to be located in areas with good supporting infrastruc-ture including data, energy and trans-port networks. Next-generation facto-ries, particularly those using Cobotics, will require uninterrupted power sup-plies and internet connectivity.Experiential factories will need to be accessible by public transport and have sufficient parking spaces for visitors. Omni-Channel factories will need to be centrally located with good infrastruc-ture to enable them to source resources from various sup-pliers as and when they are required. With I4 enabling companies to cus-tomize produc-tion, facilities are likely to shift away from speculative mass production and move towards demand-driven production closer to custom-ers. Instead of a single or small num-ber of large facilities, companies will operate more urban hubs and larger regional distribution centers. This trend is especially relevant to batch size-1 manufacturing facilities, which will be highly automated and located close to demand. Siting manufactur-ing and distribution facilities closer to customers would also reduce delivery times.Function: CBRE Research ex-pects the main trend related to build-ing function to be an overall empha-sis on greater flexibility and stronger demand for properties capable of per-forming different roles and able to switch be-tween configurations as required. Older facilities could be upgraded through redevelopment or revitalization to perform new multi-functional roles. Demand for pure logistics centers in greenfield areas could decline as they are too large, specialized and unsuited to integrated use.Fitout: I4 will drive demand for facilities, with technological features enabling them to be digitized and net-worked with internal functions and elements. Smart buildings will be capable of autonomously controlling features such as lighting, air quality and water to suit products being stored or manufactured. Factories catering to batch size-1 manufacturing would have to feature multiple smaller load-ing and unloading bays to facilitate the rapid loading and unloading of small quantities of orders. Data-driv-en manufacturing facilities would re-quire more space allocated for servers and mini data centers, and the cooling platforms supporting them. Large of-fice and laboratory spaces would have to be included in next-generation fac-tories to housedata scientists, while experiential factories would require the installation of exhibition space to showcase manufacturing processes. Conclusions: While, the develop-ment of I4 is still at a nascent stage, the advent of the digitally networked global economy is set to transform the parameters for industrial and logistics real estate in the years ahead. In this new era, reversibility and flexibility will be of critical importance. Factories catering to batch size-1 manufacturing would have to feature multiple smaller loading and unloading bays to facilitate the rapid loading and unloading of small quantities of ordersJasmine Singh, Head - Industrial Services
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