The Response Latency in Global Production and Logistics: A Trade-off Between Robotization and Globalization of a Chain

Abstract

Abstract The vision of Industry 4.0 foresees also much lower time delays between activities and feedback control. Among factors which influence delays in supply chains are long distances between activities in a complex global supply chain and the response latency of older workers, in the case that there are no properly developed programs for avoiding this phenomenon. The analysis of a trade-off between these factors is the subject of this article. Mitigating the decreasing functional capacities of the ageing workforce, to keep the old workers’ productivity on the higher level while their functional capacities are decreasing, collaborative robots and smart workstations are advised. The second solution is to move a part of production to foreign countries where the demographic structure is in favour of young workers, and human resources are much cheaper. In the article, we are developing a model for a trade-off between two solutions: to invest in collaborative robots or to develop early retirement schemes and to move the production plants abroad. Therefore, the basic trade-off is between robotisation, keeping short distances between activity cells in a supply chain, and transportation costs which include also additional costs of delays in a system. The model is based on the skeleton of the extended MRP theory of Grubbstrom and Bogataj and evaluated by the NPV and, as a novelty, also by the actuarial present value APV in the criterion function. Extended MRP enables to extend the model of multi-echelon systems which is presented by the same authors in the International Journal of Production Economics, under the title: The ageing workforce challenge: investments in collaborative robots or contribution to pension schemes, from the multi-echelon perspective to global supply chains. The article explains why it is important to link the annuities for repaying the investment in robots to the flow of funds for workers’ salaries when weighing between early retirement and investment in collaborative robots. The model is applied to a real industrial case of the production of pumps and can be easily implemented also in other international supply chains where the differences in the demographic structure, salaries and automatization between countries are substantial and the eligibility of transport costs is questionable.