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GTS Blog

Can You Guess Which Factor Is Driving Manufacturing Back to the U.S.?

Posted by Ascent Global Logistics on Mar 30, 2017 6:16:01 PM

u.s. manufacturing

As we mentioned last week, there is a ton of hype circulating about the “manufacturing renaissance.” Varied opinions exist in the marketplace ranging from optimists to realists and to those who believe that manufacturing is merely experiencing a transformation rather than a revival.

We think that’s a pretty valid argument, and there’s no doubt that something is happening to create a buzz in the industry. So what is the main factor (upon others) that is driving manufacturing back to the states?

 

Technology.

Why? Because innovation is already an integral part of U.S. culture and economy.

Here is what Robert Profusek of the Wall Street Journal has to say on the matter:

“…the fundamental factor driving manufacturing back to the U.S. is technology—computers and robots have further eroded the labor arbitrage, and the U.S. is the undeniable global leader in technology and innovation. At the same time, the U.S. is in the midst of an energy boom … producing an enormous cost and reliability advantage.”

Profusek then references a few examples of this shift: Japanese auto companies are building cars in the U.S., Chinese companies are building computers here, textile companies have reopened and technology powerhouses like Microsoft, Apple and Google have initiated re-shoring efforts in their supply chains.

 

Robert Plant provides some interesting thoughts from his recent Wall Street Journal article: In past years, the internet and low-cost distributed computing enabled off-shoring practices to succeed. Today’s economy is seeing technologies like 3D printing, lean design software & new materials cause a new mode of build-to-order manufacturing – which means production is localized closer to the customer.

This is very good news for America, because lean manufacturing & low energy costs are reducing the expense of in-country manufacturing. 

 

Ok, so production is being localized. Good. What else?

The downside of technology is that it’s forcing companies to vigorously protect their IP (intellectual property). This might actually work to America’s advantage, since companies are realizing that they need to invest in their own human capital to maintain quality control.

Plant also tilts his hat to the business & academic arenas for collaborating to support a millennial workforce that has a skilled understanding of technology and manufacturing. (Check out our latest blog post explaining the partnerships between technology & education.) The next generation of manufacturing professionals wants to create innovative products that are also low-carbon, sustainable and preferably have a “Made in the U.S.A.” label. Ambitious, right?

 

It all sounds encouraging, but are there too many optimists throwing claims through smoke and mirrors?

This is where we want your opinion. There’s a phrase we like to use at GTS to settle claim disputes: “The person with the most documentation wins.” So, does America have enough “documentation” to claim a manufacturing renaissance, and is technology the secret in? Tell us why or why not.

 

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Topics: Manufacturing