What would you do if all the manufacturing work lost to low-cost countries came back overnight?
These questions may seem like imagining what you’d do If you won the lottery – fun for a minute, and ultimately not very useful. But they’re legitimate questions for any manufacturer that’s experienced losing work based on price to ask himself and his organization. And I’ll go so far as to say this is a valuable exercise for any small or medium sized manufacturer.
There have been several reports in the recent past that show buyers of manufactured goods – including discrete parts – have taken to “on-shoring” to offset ancillary costs in the face of the global economic downturn, volatile fuel/transportation markets and quality issues.
I read a column a while back called “Emotional Homecoming” by Pete Zelinski at Modern Machine Shop that got me to thinking about those kinds of questions – because his sentiment toward on-shoring is the same as mine. On the one hand, I’m hopeful that this trend continues and grows. The U.S. belongs in the center of the competitive global manufacturing marketplace.
But wishful thinking doesn’t make it so. I’m pragmatic about the selection of low-cost alternatives to improve profits within a supply chain. The global supply chain genie is out of its bottle, and too many opportunities exist these days for your customers and prospects not to consider improving their bottom lines.
Also in Pete’s column, I found references to other articles that in turn led me to a report from the American Small Manufacturers Coalition (ASMC) titled “The Next Generation Manufacturing National Survey.” The ASMC interviewed over 2,500 small and medium sized manufacturers from 18 U.S. states to determine their “health” in 6 areas or strategies.
The categories ASMC defined as Next Generation Manufacturing enablers include “Customer Focused Innovation,” “Human Capital Development and Retention,” “Superior Process Innovation,” and “Global Engagement.” The study is interesting for many reasons, but I was struck by the disparity between small and large manufacturers when it comes to valuing these strategies.
In every case, small manufacturers showed a strong reluctance to embrace these initiatives. It’s as though they’re skeptical of change, which to me is what I find most troubling and why I’m asking these questions.
Add to this equation that the U.S. is still the number 1 manufacturing economy of choice in the world for technically advanced and superior products. The reluctance of small manufacturers to pursue new technically advanced markets and processes suggests that whatever work does return, it may not be sustainable if value isn’t established and maintained to make it less likely the work will leave again.
The point is, it doesn’t matter if the work comes back or not. What’s important is to set our companies up to win and sustain business in a global supply chain that is reinventing itself and redefining what value is.
In the end, many products that were once of a value that would sustain higher functioning businesses and standards of living are no longer. We must be asking ourselves the right questions so that we can attract more of the work that will sustain us and establish our value to the world.
Change is hard, but asking the right questions can be the catalyst for capitalizing on that change and attracting work back from customers whose expectations have changed.
Written by: Mitch Free, Contributor
I have a unique bird’s eye view of the manufacturing economy.