BHR Global Associates, Inc. is dedicated to helping companies bring their products to market successfully. We can help with finalization your design, to helping find the right source at the right price, help you maintain a solid on going supply chain and help you sell the product through our team of sales professionals. Our blog will supply information and details on successes, failures, and road blocks to avoid in bringing products to their full potential.

Sunday, October 06, 2013

Bringing Manufacturing Back To The USA

There may be a great deal of product manufacturing being brought back from China and elsewhere but that "reshoring" activity will not bring a resurgance of manufacturing jobs. The products that are being and will be brought back are those where the labor content is minimal and can be further reduced through the use of robotics and technological and process advancements. Also those products where freight is a large component of the cost will be a potential for reshoring but hear again they will be brought back with the labor content reduced due to improved process and the use of advance robotics. Today as an example of process improvements it takes about 30% of the labor to produce a ton of steel as it did in the early 1970's. Those jobs will never come back regardless of the amount of growth in the steel industry. The same type of numbers exist in other industries. The advancement in the types of robotics available is remarkable as is the reduction in costs of the robotics. They are as inexpensive as $22000 and can be programmed is as little as ten minutes without any knowledge of programming. All this being said the regrowth of the "manufacturing working class" is not going to happen. We can however grow this group by teaching them skills to run the robotics as well as maintain them. Also those skills such as those needed to be a machinist, mechanic, and similar will in my opinion be wanting in the near future. Based upon what I recently saw Robots will in the near future replace workers in healthcare and other service areas where basic human tasks can be programmed. Therefore to grow or regrow the "middle class" the education system needs refocusing onto jobs and skills that cannot be outsourced. Companies also need to understand the true costs of products and services being outsourced versus the cost of performing or buying the products and services domestically. If the base costs of products are compared one against the other and the difference is not greater than 35% then there is NO advantage to outsourcing the product when the true total costs is undrrstood and measured. The same reasoning in my opinion should be the measurement for outsourced services. I have heard of a number of "horror" stories concerning outsourced services taking too long or not delivering the results required or promised.


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