ENGINEERING & MANUFACTURING 2025+
A DHL Perspective on Future Engineering & Manufacturing Supply Chains
Trends such as shifting markets, changing consumer demand, compliance, volatility, skills shortages, and new technologies are set to radically impact every aspect of engineering and manufacturing (E&M), especially aviation and aerospace, non-energy mining, industrial equipment, and construction equipment.
To help organizations exploit these trends for future growth, this report capitalizes on DHL’s unique experience in various industries and interviews with key players in the E&M sector. It identifies and explores the major transformations anticipated by 2025 and beyond – the switch from production sites to smart factories, the adoption of more sustainable manufacturing processes, the development of new customer-centric business models, and greater innovation through sometimes unexpected collaboration.
And the supply chain of the future will have to be designed to respond flexibly to any new piece of information provided by the digitized value chain. We believe that the future supply chain will be much more integrated across manufacturing clusters of suppliers, manufacturers, and aftermarket service providers.
Key Findings
Shifting Markets / Labor and Skills Shortage
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Greg King
Global Sector Head, Business Development
Engineering & Manufacturing – Heavy EquipmentGreg King is the Global Sector Head, Engineering & Manufacturing – Heavy Equipment for DHL Industrial Projects. In this role, he is responsible for strengthening DHL’s presence in project management including OOG and heavy lift management for projects within the industrial equipment, construction equipment, power stations, transformers, transport, and aerospace industries.
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"We will operate in geographies we do not operate in today. I believe that Africa and Central Asia are the next places for farming. Africa might also be the next big thing for construction.” The center of economic gravity is continuing to shift east, mainly fuelled by the growth of eastern economies. Numerous E&M companies have already moved large elements of production eastwards, profiting from lower wages and lower production costs. More importantly, these developing countries of the east are gaining significance as valuable regions for sales.
Currently, our E&M customers agree that the BRIC countries will, for the most part, remain at the center of their attention. In addition, they are starting to look beyond BRIC. Many report exploring available opportunities in new emerging countries such as Mexico, Indonesia, Nigeria, and Turkey. To succeed in these new markets and meet new local needs, these companies will require access to local R&D, production, and assembling facilities, and will need to establish regional supply chains. As a result of these shifts, E&M markets are likely to become geographically fragmented as the number of markets and sub-markets grows.
Customization and Convergence of B2B and B2C
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David Wilson
Executive Vice President Sales Global / Europe
DHL ExpressDavid Wilson is the Executive Vice President of Sales of DHL Express Global and Europe, the market leader in the international express industry in Europe with €13 billion in revenue. David oversees DHL’s sales focus to expand its leadership in the express industry in Europe.
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A big driver is changing customer demand. Between 1997 and 2012, the average product lifecycle in the automotive, chemical, engineering, and pharmaceutical industries declined by about a quarter, while the number of product variations increased by 220%? There are no more static portfolios. Today it’s all about customization and personalization, and E&M companies will see a lot more diversification in future.
Compliance and Sustainability
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Gio Theunissen
Vice President Engineering & Manufacturing, Aerospace
DHL FreightGio Theunissen is Vice President / Global Sector Head with DHL Freight, the overland transportation company of DHL. He is responsible for the development and growth in the E&M sector and Aerospace together with his team of global account managers. Gio has a strong focus on building customer relationships, and strategic developments that support customer needs.
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Probably every E&M business now includes sustainability in corporate strategy, and we believe its importance will increase in the future, impacting many areas of the organization. Industrial production is responsible for about 30% of the world’s total energy consumption, so today we’re seeing a focus on improving energy efficiency, reducing greenhouse gas emissions, and increasing renewable energy usage.
Volatility and Exogenous threats
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Mark McGonegal
Vice President and Global Sector Head
Engineering and Manufacturing
DHL Global ForwardingMark McGonegal is the Vice President, Global Sector Head, E&M for DHL Global Forwarding. He has direct management responsibility for the E&M team in the Americas region, and a reporting relationship to the Asia Pacific and EMEA teams, driving profitable sales growth and business development strategy across all sales channels.
Global E&M companies are increasingly exposed to ecological risks. Continued climate change is resulting in more frequent and more intense natural catastrophes such as flooding, storms, and droughts.
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The answer is to improve resiliency. Up until now, E&M companies have tended to design supply chains with the ultimate goal of minimizing cost and maximizing customer benefits. Now we expect this to change. In future, supply chains will be designed for greater resilience and built around risk management.
New Technologies
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Todd Starbuck
Vice President and Global Sector Head Engineering and Manufacturing
DHL Supply ChainTodd Starbuck is the Executive Vice President (EVP) for Business Development and Account Management at DHL Supply Chain, responsible for the development, growth, and retention of approximately €6 billion in profitable customer revenue and an annual growth of over €1.8 billion of new business. His role focuses on strategy, development, staffing, efficiencies and key customer relationships.
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All steps of the future supply chain will be linked, from inbound-to-manufacturing to aftermarket logistics. Supply chain visibility will become critically important to track and control the end-to-end flow of materials between suppliers, into the factory, and out to customers. And the supply chain of the future will have to be designed to respond flexibly to any new piece of information provided by the digitized value chain. We believe that the future supply chain will be much more integrated across manufacturing clusters of suppliers, manufacturers, and aftermarket service providers.
