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How Smaller Companies Can Bring Manufacturing Closer to Home



Global pandemics, trade wars, and geopolitical conflicts pose challenges to the manufacturing industry. A recent survey among manufacturing executives revealed that 44% of respondents consider supply chain risks among their top three concerns.

In response, manufacturing companies plan to regionalize (parts of) their production with a view to increasing their resilience to external shocks — 43% of respondents already have specific relocation plans. European retail chain C&A, for example, intends to produce 800,000 jeans per year in a German factory, and Walmart has committed to spending an additional $350 billion through 2030 on items made, grown, or assembled in the U.S.

However, relocating production to countries with high labor costs is expensive. Companies cannot replicate the labor‐intensive production setups and technology used in countries like India, China, and Vietnam. To be cost-effective reshoring requires investment in automating and digitizing production processes. A number of European bicycle manufacturers, for example, are currently relocating frame production to high‐cost countries using fully automated processes — V Frames in Germany and Triangles in Portugal being cases in point.

But while large‐scale producers can distribute required heavy investments across high volumes, small‐scale producers do not have this luxury. They cannot fully utilize asset‐heavy production processes, leading to high machinery costs relative to their volume. A new production model, Production as a Service (“PaaS”), is emerging as a solution to this problem

A New Production Model

“As-a-service” models decouple utilization of equipment from ownership. They first gained scale in IT, when software providers shifted to a subscription model for their products. Content consumption (for example, Netflix or Spotify) and mobility (such as Care by Volvo and TIER Mobility) are among the most visible applications of the model.

In industrial settings, as-a-service models have already appeared at the level of individual production components. Since 2020, for example, Trumpf and Munich Re have joined forces to offer use of a laser cutting machine as a service. Other instances include ALD Vacuum Technologies (which supplies heat treatment), Kaeser (compressed air), and Rolls Royce (power).

PaaS expands this approach to the scope of an entire factory. The fully realized concept has three elements: flexible production, asset sharing, and financial transformation.

Flexible production.

In a limited number of product categories, factories can make multiple different products on the same manufacturing process — an injection molding producer can produce wine storage boxes and industrial pallets on the same machine using different tools. In most cases, though, products require specific processes which limit the ability to switch production to other, completely different products. But factories can still produce variants of the same product. For example, Porsche has developed the Multi Product Line, a highly flexible body‐in‐white production concept that can produce hang‐on parts for Porsche, but also for other, non‐Porsche brands.

Asset sharing.

By sharing a factory small‐series producers, which do not have sufficient volumes to fully leverage the capacity of highly automated production equipment, can enjoy some of the cost benefits that come from scale. To be sure, sharing facilities with unrelated companies creates compliance, antitrust, and intellectual property risks. Protection mechanisms are needed, like those commonly found at suppliers serving multiple competing customers. For example, critical products must be protected from sight when customers visit the site and sensitive data must be strictly separated.

Financial transformation.

As-a-service models decouple equipment utilization from ownership, as external investors finance and own the production assets. In many cases external investors may be reluctant to assume all the risks associated with the assets, notably underutilization. In many cases some of the risks can be allocated elsewhere — for example, insurance companies can take risks through risk transfer products, such as a technical availability guarantee, or users can provide utilization guarantees.

PaaS factories are not yet fully evolved. However, there are some examples of production facilities that are almost there, notably the Smart Press Shop in Germany.

The Smart Press Shop

Sports car manufacturer Porsche needed access to an updated press shop in order to benefit fully from technological innovations in the production of chassis parts. But press shops require high utilization to distribute investment costs across as many parts as possible. As a small‐series producer, Porsche did not bring enough volumes to fully utilize a new press shop all by itself.

The automaker decided to take an unconventional approach. It established the “Smart Press Shop GmbH & Co. KG” as a 50‐50 joint venture with Schuler, a press manufacturer, supported by additional debt financing provided by a consortium of banks. The Smart Press Shop (SPS) is a highly flexible press shop, specializing in producing small lot sizes efficiently. Many smart features enable flexible production, such as fully automated tool change‐over, a laser blanking line, and many others. The flexible production system in combination with the joint venture structure enables the Smart Press Shop to offer spare capacity to other automakers (even outside the VW Group).

Through the combination of flexible production and sharing, the Smart Press Shop is capable of meeting Porsche’s quality requirements at competitive costs. The SPS has been fully operational since June 2021 in Halle (Saale), Germany, and acts as an independent supplier to the market. As of today, it produces body parts for Porsche Macan and Panamera, Bentley and expects to become a Tier 1 supplier for other OEMs very soon. “We made production-as-a-service tangible in the Smart Press Shop and proof that PaaS can be realized today, even on a larger scale,” says Christian Hoedicke, managing director of the Smart Press Shop.

The Payoff

PaaS yields multiple benefits for all involved parties.


All asset users can reduce the upfront investment into production and tied‐up capital (turning CapEx to OpEx). The freed‐up capital can then be used for innovation. In addition, small‐scale producers profit from economies of scale through sharing, which enables a factory to operate larger assets.


Providing ongoing services yields multiple advantages for asset producers, including recurring, predictable cash flow and more customer touchpoints to strengthen customer relationships. Moreover, customers in a PaaS setting assess a service provider’s performance by evaluating production output, not machine functionality, which can lead to improved customer satisfaction.


PaaS creates a new asset class for external investors, with the production equipment providing tangible collateral. External investors would get access to investment opportunities in otherwise non‐investable assets and can diversify their portfolios in light of increasing market uncertainty. Moreover, the risk‐return profile can be tailored to investor expectations through risk‐sharing structures. Market analysis reveals that outside investment in plant and machinery through the PaaS model could potentially amount to $72–98 billion annually, including  $22–26 billion in the U.S., the same again in China, and $5–7 billion in Germany.

More generally, PaaS makes reshoring economically feasible by addressing scale challenges through sharing, which efficiently provides high levels of capacity utilization. This in turn reduces the length of supply chains and associated CO2 emissions. In addition, sharing. Consequently, PaaS contributes to a more sustainable manufacturing industry.


This post was originally published on this site

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Growing a Business

2023’s Festive Formula: Small Business Success in the Extended Holiday Season

Navigate the unique landscape of the 2023 holiday shopping season with our expert guide. Discover how small businesses can capitalize on extended consumer spending, leveraging the latest trends in personalization, online marketing, and fast fulfillment. From creating an enchanting in-store experience to mastering the digital realm, learn how to harness consumer behavior shifts for a prosperous holiday period. Get ready to transform challenges into opportunities and make this festive season your most successful yet!



The holiday season is a pivotal time for small businesses globally. With 2023’s extended holiday shopping period and consumer trends towards affordability and unique experiences, small businesses have unique opportunities to thrive.

Understanding the Holiday Shopper

Modern consumers are trading down, seeking value while also desiring experiences and personal connections. They prefer businesses offering unique, personalized services, and community engagement. This shift opens up numerous opportunities for small enterprises.

Creating a Festive In-Store Experience

Physical stores can become holiday attractions. Creative decorations, themed events, and promotions, coupled with an omnichannel approach combining in-store and online experiences, can attract and retain customers.

Leveraging Online Platforms

A strong online presence is critical. Enhance your digital platforms with festive themes, promotions, and gift guides. Utilize AI and generative AI for personalized marketing and improve online interactions through advanced chatbots.

Harnessing the Power of Social Media

Social media offers a platform for inspiration and engagement. Utilize platforms like Pinterest, Instagram, and YouTube to inspire and engage your audience. Collaborative promotions with other businesses can create unique experiences.

Personalization and Customer Service

Personalization is crucial. Use customer data to offer customized experiences and promotions. Exceptional customer service, both in-store and online, is vital to meet high consumer expectations.

Fast Fulfillment and Inventory Management

Consumers expect fast fulfillment options like same-day delivery and curbside pickup, especially among younger demographics. Efficient inventory management and transparent communication about product availability are essential.

Post-Holiday Strategies

Extend holiday strategies beyond December. Post-holiday sales, exchanges, and New Year promotions can drive ongoing traffic and sales. Use this period for collecting feedback and data analysis for future strategies.


The extended 2023 holiday season offers small businesses the chance to adapt and excel. By embracing consumer trends towards value, experiences, and fast fulfillment, and leveraging technology for personalization and efficiency, small businesses can enjoy a successful holiday season.

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Growing a Business

Unlock the Power of Email: 2023’s Ultimate Guide to Personalized Marketing Mastery



In the rapidly evolving digital landscape, email remains a cornerstone of business communication. Contrary to the whispers of naysayers, email is not an antiquated relic but a dynamic tool, continually adapting to the latest trends and technologies. In this article, we explore how small businesses can craft compelling email campaigns that resonate with today’s audience.

1. The Art of Personalization

Gone are the days of generic, one-size-fits-all email blasts. In 2023, personalization is not just a buzzword; it’s a necessity. Utilizing data analytics to segment your audience and tailor your messages can significantly increase engagement rates. Personalization goes beyond inserting a first name; it’s about crafting content that reflects the individual interests, buying behaviors, and preferences of your subscribers.

2. Mobile-First Email Design

With the majority of emails now opened on mobile devices, a mobile-first design approach is crucial. Emails should be visually appealing and easily readable on smaller screens, with responsive design and clear call-to-action (CTA) buttons. Additionally, loading times should be minimal, and images optimized for quick and efficient loading.

3. Interactive and Visual Content

Incorporating interactive elements like surveys, polls, or clickable sliders can boost engagement and provide valuable feedback. Visual content, such as infographics and videos, can increase open rates and make your emails more memorable. With the rise of platforms like TikTok and Instagram, incorporating short-form video content into your emails can be particularly effective.

4. Authenticity and Brand Storytelling

Consumers are increasingly drawn to brands that showcase authenticity and a compelling narrative. Use your email campaigns to tell your brand’s story, share your values, and build a deeper connection with your audience. This approach not only fosters loyalty but also differentiates your brand in a crowded market.

5. AI-Driven Email Optimization

Artificial Intelligence (AI) is reshaping email marketing. From predictive analytics that forecast the best time to send emails to AI-powered copywriting tools that help create compelling subject lines, integrating AI can significantly enhance the effectiveness of your campaigns.

6. Privacy and Data Protection

With growing concerns about data privacy and the introduction of regulations like GDPR, ensuring the privacy and security of your subscribers’ data is more critical than ever. Be transparent about how you collect and use data, provide easy opt-out options, and maintain compliance with data protection laws.

7. Measuring Success and Adapting Strategies

Finally, the success of an email campaign is in its metrics. Open rates, click-through rates, conversion rates, and unsubscribe rates provide insights into what works and what doesn’t. Regularly reviewing these metrics and adapting your strategy accordingly is key to continual improvement.


Email marketing remains a vital tool for small businesses, offering a direct line of communication to your audience. By embracing personalization, optimizing for mobile, leveraging interactive and visual content, staying authentic, utilizing AI, respecting privacy, and adapting to feedback, your email campaigns can achieve greater relevance and impact in the ever-changing digital era.

This article aims to provide small businesses with up-to-date insights and actionable tips on creating effective and engaging email campaigns that align with current trends and consumer expectations.

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Revolutionizing Marketing: The Power of AI in the Digital Age



Embracing AI-Powered Marketing: Transforming Brands in the Digital Marketplace

In the crowded digital marketplace, standing out is challenging. Enter AI-powered marketing, a revolutionary upgrade transforming brands into digital powerhouses.

Hyper-Personalized Campaigns: Beyond Basic Personalization

Gone are the days of generic marketing. Today’s gold standard is AI-driven hyper-personalization. This approach uses customer data analysis to create deeply resonant, individualized marketing campaigns. With AI’s ability to segment audiences based on intricate criteria, including purchasing history and browsing behavior, your messages can hit the mark every time.

Enhanced Customer Journey Mapping

AI’s capabilities extend to mapping the entire customer journey. By predicting needs and preferences at each stage, AI aids in crafting narratives that guide customers from discovery to purchase, integrating your brand into their personal stories.

SEO Wizardry: Mastering Search Engine Dynamics

With ever-changing algorithms, SEO is a complex puzzle. AI serves as a sophisticated navigator, deciphering these changes through machine learning. It aids in keyword optimization, understanding search intent, and aligning content with search trends.

Predictive SEO

AI tools offer predictive SEO, anticipating search engine and user behavior changes. This proactive stance ensures your brand’s prominent visibility in search results, capturing the right audience at the right time.

Social Media Mastery: Crafting a Digital Narrative

AI transforms social media strategies from uncertain to precise. By analyzing vast social data, AI provides insights into resonating content.

Content Optimization

AI analyzes performance data to recommend effective content types. This data-driven approach refines your social media content strategy.

Engagement Analysis

AI examines user interaction nuances, understanding engagement patterns. It helps tailor interactions for maximum impact, including adjusting posting schedules and messaging for increased relevance.

Conclusion: Navigating the AI-Driven Marketing Landscape

AI-powered marketing is essential for thriving in the digital age, offering precision and personalization beyond traditional methods. For small businesses, it’s a chance to leverage AI for impactful, data-driven strategies.

As we embrace the AI revolution, the future of marketing is not just bright but intelligently radiant. With AI as your digital ally, your brand is equipped for a successful journey, making every marketing effort and customer interaction count.

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