12 manufacturing icons still “made in the USA”
Posted by Bert Maes on March 18, 2010
The post “A look at 12 All-American icons that are now manufactured on foreign shores” drove me slightly crazy. The truth has always many different aspects and perspectives.
It is true: some iconic brands no longer carry the “Made in the USA” label.
BUT did you know others are still here and are even coming back from Asia??
- TEXAS INSTRUMENTS Inc., the second-largest U.S. chipmaker will spend almost $1 billion this year to expand three factories in the US.
- Computer maker DELL Inc. still prefers to produce semiconductors in the US, particularly because their manufacturing is highly complex, and it is more efficient to be close to the US-based design centers.
- Memory-module producer AVANT TECHNOLOGY recently opened a new 50,000-square-foot plant in Texas, because they will be able to deliver quicker to clients and don’t have to pay the high freight costs of shipping goods from China.
- WIND TURBINE PRODUCTION will be hard to source offshore since these parts are often large (high transport costs/time), complex (think skilled machinists – not minimum wage workers), and involve advanced technology – much of which is (or will be) developed in the US.
- CATERPILLAR Inc. is considering relocating some heavy-equipment overseas production to a new U.S. plant: a weak U.S. dollar makes it costlier to import products from overseas ~ shipping costs, complicated logistics, and quality issues.
- GENERAL ELECTRIC Co. said last June it would move production of some water heaters from China to its facility in Louisville, Ky., starting in 2011.
- U.S. BLOCK WINDOWS Inc. came back the U.S. With the costs and complexities of the inventory and lead times, there really wasn’t any savings.
- HAAS AUTOMATION, Inc., is the largest machine tool builder in the western world, producing 14,000 high precision CNC machines per year in its 100 000 m2 manufacturing and assembly facility located in Oxnard, California. They do that with just 1000 designers, engineers and factory workers (25% of workforce of main competitors), using highly automated machinery and the latest robotics technologies. But unfortunately this is a crucial product in our modern society you probably never heard of… >>> See article: The philosophy of California company has redefined what’s successful in a new manufacturing century]
- LITTLE TIKES, producer of the ride-along toy car Cozy Coupe, manufactures in the USA using highly specialized equipment and cost-effective robotics automation allowing to produce its big toys with relatively few workers. In addition, the fact that the manufacturing operation is just steps from his office makes it easier for the company to quickly respond to the latest fads, or to make a small batch of a specialized toy.
- “American factories continue to churn out hundreds of billions of dollars worth of goods annually — everything from FORD trucks and BOEING airplanes to GORDON & SMITH surfboards and VIKING appliances. U.S. plants also still produce, assemble or manufacture tons of fertilizers, cosmetics, pharmaceuticals, computer chip components and specialized industrial machine parts.” (msnbc)
- Emerging companies such as NANOSOLAR Inc., which is riding a wave of demand for “green energy” equipment, as well as established firms such as INTEL Corp. are investing billions in U.S. production facilities. IBM established a cluster of high-tech research labs and production plants. (Tribune.com)
- “High-value items, such as medical devices and semiconductors, are made here because their complexity requires highly skilled workers and close coordination with designers and engineers. Mostly missing from the US manufacturing landscape are familiar consumer products such as toys, apparel and home electronics.” (msnbc)
CONCLUSION: China’s manufacturing industry is becoming less competitive. Today manufacturing is being re-shored back to the western world:
- Chinese manufacturers have trouble in guaranteeing their US and European customers accurate delivery dates because of unforeseen delays in the supply chain;
- Chinese manufacturers will have more difficulties to make quick changes in the manufacturing process – Without a strong workforce (China has to close down production lines because they lack a skilled workforce for their factories!), it will be harder for them to quickly customize products;
- The risks involved with a supplier in China get bigger. Western manufacturers have begun to pull their supply chains back closer to their markets, closer to their customers – which are asking for custom-made solutions and just in time delivery.
- If you’re buying stuff from overseas, will you get the services you need??