As the COVID-19 crisis swept its way across France, some of the products people needed the most — masks, respirators and key electronic components — simply weren't available. Even more jarring was the fact that factories here couldn't even respond to the shortages in a timely manner.
Indeed, the pandemic was a wake-up call in that respect, a painful reminder of the French industrial sector's evolution and resulting shortcomings.
The country's "make" rate — i.e. products that are manufactured in France — is currently about 64%. In Germany and Italy, in contrast, this indicator is between 70% and 75%. However modest it may seem, the discrepancy is actually a big deal, and goes a long way to explain the deficit in France's trade balance.
To restore the balance, we would need an additional 30 billion euros of locally produced products introduced into our local value chains. Those additional products would also mean more jobs, especially in France's more peripheral areas, the same regions that gave rise to the gilets jaunes, the yellow-vested protestors who made such a big mark prior to the pandemic.
We're talking here about re-industrializing. It's common sense, at least economically and socially. But it's also easier said than done. Would people really welcome new factories in the landscapes we love so much? What about the accidents that sometimes occur? The massive chemical fire that erupted last year at the Lubrizol factory in Rouen is a case a point.
France relocated portions of its industrial sector for cost reasons. But those same facilities — the heavy industry, textiles, electronics plants and plastics producers — are also often very polluting. There's much more to consider, in other words, than simply reimporting such businesses. We will also have to question the environmental production model, with an emphasis on what raw materials are consumed, the type of energy that is used and how to manage the waste such factories produce.
Building the necessary trust with local populations means ensuring transparency from beginning to end so that all stakeholders are directly informed of the externalities associated with the industrial system.
Workers at the Moteurs Baudouin diesel engine factory in Cassis, France — Photo: Gao Jing/Xinhua/ZUMA
Damien Marc, managing director of JPB Système, a mechanical engineering firm focused in aviation, asked himself precisely these questions. Five years ago, he intensely robotized his French factory rather than investing more in Poland. But becoming as competitive as a Chinese or Vietnamese competitor requires more than an army of robots. It also requires a whole new organizational model.
After the "lean manufacturing" that led to the emergence of controlled globalization in the 1980s, there's a push now to focus on what are known as "hyper-manufacturing" methodologies. The "hyper" model implies a complete overhaul of existing industrial systems, and promises improved environmental footprints. And it isn't just a theory: Larger and smaller companies including Somfy, Velum, Lisi and Diam Bouchage have already started to put in place the foundations of hyper-manufacturing and are reaping the benefits.
The model involves two crucial foundations. The first is complete transparency, allowing total traceability of what is produced. This guarantees the origin of the products, the ethics with which they were manufactured, their carbon footprint and their flawless quality. The second key element is to have work flows capable of handling highly volatile demand thanks to predictive models and a high degree of industrial adaptability.
In the COVID-19 period, these two pillars are all the more important as they are synonymous with local employment, resilience and adaptation to needs. "Reshoring," relocation and re-industrialization are desirable and exciting. They're also possible, but only if we're willing to embrace a radically updated system.
*Michaël Valentin is associate director of OPEO and author of the book Hyper-manufacturing.
See more from Business / Finance here