Manufacturing may be poised for a quantum leap that will rival the transformation that took place nearly 100 years ago when Henry Ford revolutionized industry with the creation of the assembly line, say industry experts.
In fact, President Barack Obama has made advanced manufacturing — which incorporates the integration of information technology, human innovation, energy efficiency and waste reduction — a cornerstone in his initiative for boosting U.S. manufacturing and jobs growth.
In June 2011, Obama launched the Advanced Manufacturing Partnership, a national effort to unite industries, universities and the government to invest in the emerging technologies that will create high-quality manufacturing jobs and bolster global competitiveness. He also announced an initiative to invest $500 million to help develop advanced manufacturing technologies and jobs.
How does advanced manufacturing differ from traditional factory output? Fred Wentzel, vice president of industry relations and workforce development at the National Council for Advanced Manufacturing, says the best way to explain the difference is to look at the definition developed by his former colleague Paul Fowler.
As Fowler explains it, advanced manufacturing harnesses the efficiency of mass production and marries it to the flexibility of custom manufacturing. The goal is to respond quickly to customer demand by using high-precision information technology. Wentzel says gone are the days when manufacturers would produce “X number whether there was a market for it or not.”
“We’re not in a mass production mode,” he says.
Wentzel notes that while advanced manufacturing is hard to quantify, it transcends all industries. Already pervasive, it is seen as a necessary tool for U.S. manufacturers under pressure from global competition.
“You see it at Boeing [BA 67.72 -1.89 (-2.72%) ] , at Pratt and Whitney. You’re seeing it in the auto supply industry; you see it in companies like Caterpillar [CAT 86.03 -1.59 (-1.81%) ], Johnson Controls [JCI 29.18 -0.96 (-3.19%) ] and Rockwell Automation [ROK 68.86 -3.65 (-5.03%) ]— anywhere where the primary task is to find a way to make something better, cheaper and with fewer people,” he says.
Wentzel adds it is not that companies are going out of their way to reduce their number of employees, but as computers and advanced technology enter the equation, the need for large amounts of laborers diminishes while the desire for a smaller, more skilled workforce emerges.
Obama, for his part, is attempting to incorporate advanced manufacturing into his goal of doubling exports by 2015 and expanding U.S. manufacturing. In February, he called on Congress to create an $8 billion “Community College to Career Fund” to be spent over three years to train 2 million workers for careers in high-growth industries such as advanced manufacturing.
Jeff Immelt, chief executive officer of General Electric, who heads Obama’s Council on Jobs and Competitiveness, explains in the March issue of the “Harvard Business Review” just how transformational advanced manufacturing can be.
Immelt says that while the focus remains on creating top-of-the-line designs and high-quality products, by updating a 25-year-old dishwasher line, the production team at Appliance Park in Louisville, Ky. was able to cut production time by 68 percent and reduce the space required by more than 80 percent.
By engaging the workforce at each stage from design to development to assembly, employees in Louisville have cut the time it takes to build a refrigerator—typically nine hours—in half.
Jim Davis, vice provost of IT and chief technology officer at UCLA, says technology and highly skilled workers go hand in hand.
“The shift toward smart manufacturing will transform the factory into a place in which people increase in importance and are actually interacting with the devices in much more strategic and informed ways,” he says.
Because manufacturing is becoming more automated and specialized, employers have begun to bring jobs back to the U.S. With smaller numbers of workers, the cost of labor becomes less of an issue, says Wentzel, and companies can start to focus on reducing other expenses.
The automotive industry is one that is experiencing a boom as a result of advanced manufacturing and, subsequently, many jobs that had previously been outsourced are returning to the U.S.
Earlier this year, Georgia Gov. Nathan Deal announced that Japan-based Toyota Industries will open a $350 million compressor production plant in Jackson County. The operation, known as Toyota Industries Compressor Parts America, TICA, will be located next to TD Automotive Compressor as the two operations complement one another.
Toyota will manufacture the main parts of vehicle compressors, which will be assembled at the TD compressor plant. Currently, the main parts of vehicle compressors are imported from Japan. Bringing the manufacturing right next door avoids costly shipping delays, something Toyota faced in 2011 when its tsunami shuttered factories.
Toyota also supplies parts to Chrysler, Ford [F 10.19 -0.37 (-3.5%) ], General Motors [GM 21.60 -0.60 (-2.7%) ] and other automotive companies. The Pendergrass plant, which is expected to open by late 2013, will create 320 jobs in the area.
Around the same time, Frank-Peter Arndt, BMW’s production chief, announced the company will invest nearly $900 million over the next three years in its Spartanburg, S.C., plant.
In addition, BMW will add 300 new jobs this year, raising production capacities up to 300,000 units. In 2011, the plant produced 276,065 vehicles for over 130 markets around the world, which represents a 73 percent increase over 2010.
By assisting U.S. industry in becoming more predictive, efficient and sustainable, advanced manufacturing can be transformational in offering a portal into staying competitive in the global marketplace while providing opportunities for skilled workers.
© 2012 CNBC.com
Orders for U.S. Manufactured Goods Increased in May
by MAM TeamPublished: July 3, 2012
Still, factory orders are down from the start of the year. And more recent data shows manufacturing activity shrank in June for the first time in three years, adding to worries that weaker global growth is weighing on the economy.
“The demand for manufactured goods is recovering moderately and irregularly, but that recovery has been relatively weak relative to the magnitude of the previous declines,” said Steven Wood, chief economist at Insight Economics.
Core capital goods, which include machinery and computers, rose 2.1 percent, which is better than the 1.6 percent estimated in a preliminary report a week ago.
Overall factory orders increased to $469 billion. That’s 43.5 percent higher than the recession low reached in March 2009. But orders have fallen 2.5 percent over the last five months from their postrecession high in December.
Orders for long-lasting durable goods, everything from airplanes to refrigerators, rose 1.3 percent in May. Orders for nondurable goods, which include food, paper, chemicals and energy products, edged up 0.2 percent. The increase may have been held back by falling oil and gas prices.
Still, orders are likely to decline in June, based on a report from the Institute of Supply Management. The trade group of purchasing managers on Monday said manufacturing contracted in June for the first time since July 2009 — one month after the recession ended
'Reshoring' of Jobs Looks Meager
by MAM TeamThe net effect of this two-way traffic on the labor market has been “zero,” says Michael Janssen of the Hackett Group, a business consulting firm that released a contrarian report on reshoring in May. “Some of these jobs that are coming back get a lot of press,” he says. “There are just as many that get no press coverage still going offshore.”
No one knows how many of the manufacturing jobs created since 2010 actually made a round trip from the U.S. to a foreign address and back. And if jobs are returning, they’re doing so slowly. At the current pace of recovery, it will take 25 years for the U.S. to regain all the factory jobs lost since 2000.
China’s cost advantage is gradually eroding. In 2005 production in China was 31 percent cheaper than in advanced nations, according to the Hackett Group’s calculations. By 2013 the gap will be down to 16 percent, small enough for U.S. production to make sense in some cases, says the study. Likewise, Hal Sirkin, who wrote a 2011 Boston Consulting Group report that’s optimistic about a U.S. manufacturing comeback, estimates that over the next eight years 2 million to 3 million jobs could result from improved U.S. competitiveness. “A significant chunk will be jobs that went to other countries and came back,” he says.
So far, many of the jobs China is losing aren’t heading to the U.S. but to other low-cost Asian nations. Rising wages in China led Coach to start looking for alternate places to make its wallets and handbags. By 2015 the company aims to reduce China’s share of its production to about 50 percent from almost 80 percent today. New orders will be sent to factories in Vietnam, Indonesia, Thailand, and the Philippines. Reshoring to somebody else’s shores will be more common in coming years than jobs returning to the U.S., says Tim Leunig, who teaches economic history at the London School of Economics: “The next president of the United States, whoever he is, will end his term with fewer Americans working in manufacturing than he inherited.”
The bottom line: Though manufacturers have created 495,000 jobs since 2010, there’s little evidence it’s because of a reshoring surge.
———————-
Lynch is a reporter for Bloomberg News in Washington.
Obama Administration Challenges China’s Unfair Imposition of Duties on American-Made Automobiles
by MAM Team“As we have made clear, the Obama Administration will continue to fight to ensure that China does not misuse its trade laws and violate its international trade commitments to block exports of American-made products,” Ambassador Kirk said. “American auto workers and manufacturers deserve a level playing field and we are taking every step necessary to stand up for them. This is the third time that the Obama Administration has challenged China’s misuse of trade remedies.”
This is the latest in a series of enforcement steps the Administration has recently taken to continue to hold China accountable for its WTO commitments. In two earlier WTO cases, the United States challenged duties that China had imposed to restrict imports of certain steel products and chicken products from the United States. The United States has also brought actions against China’s export restraints on several industrial raw materials, including rare earths, China’s restrictions on electronic payment services and subsidies to China’s wind power equipment sector. In each of these matters, the key principle at stake is that China must play by the rules to which it agreed when it joined the WTO. Those commitments include maintaining open markets on a non-discriminatory basis, and following internationally-agreed procedures in a transparent way. In addition, the United States previously invoked a China-specific safeguard to address rapidly increasing imports of Chinese passenger and light truck tires.
Background:
Shortly after President Obama decided in September 2009 to impose a safeguard measure against Chinese tire imports, China’s Ministry of Commerce announced that it would initiate antidumping and countervailing duty investigations of imports of American-made cars and sport utility vehicles (SUVs). Then, in May 2011, China’s Ministry of Commerce issued final determinations in which it found that imports of American-made automobiles had been sold at less than fair value (i.e., “dumped”) into the Chinese market and had also benefited from subsidies. WTO rules permit imposition of duties on imports of merchandise that are found to be dumped or subsidized, if those imports cause injury to the domestic industry. However, at that time, China suspended the imposition of duties.
Subsequently, in December 2011, China began imposing both antidumping and countervailing duties on imports of American-produced automobiles. The antidumping duties range from 2.0 percent to 8.9 percent, with an “all others” rate of 21.5 percent, and the countervailing duties range from 6.2 percent to 12.9 percent, with an “all others” rate of 12.9 percent. The specific products affected by the duties are American-produced cars and SUVs with an engine capacity of 2.5 liters or larger. Last year, the United States exported more than $3 billion of these automobiles to China.
The United States believes that China initiated the investigations without sufficient evidence; failed to objectively examine the evidence; and made unsupported findings of injury to China’s domestic industry. In addition, China failed to disclose “essential facts” underlying its conclusions; failed to provide an adequate explanation of its conclusions; improperly used investigative procedures; and failed to require non-confidential summaries of Chinese company submissions.
See here for a copy of the U.S.’s request letter to the WTO.
American Pride Turns into Profit for Young Entrepreneur
by MAM TeamPublished July 04, 2012
“It really hit home for me, even though I was just a six-year-old. I was like, ‘Daddy let’s show them that we’re Americans,’ ” said Waldon, now 17.
Before the Waldons knew it, Emily had a decent business on her hands. She named it Flagpole Express.
“All we want is for people to have flagpoles and be able to have them in their front yard, because as Americans we need to show that we’re proud,” the young entrepreneur said.
In the last eleven years Flagpole Express has built, delivered, and installed more than 500 flagpoles at homes and businesses throughout Mississippi, Memphis, Tenn., and in parts of Arkansas.
“What we make is the best you can get,” Emily said with a smile.
Emily puts the poles together at home with her dad, usually after school when she’s done with homework, and then they deliver and install the flagpoles on the weekends.
“This is a country that the American dream is possible and really that’s what occurred with her little business,” said Emily’s Dad, Bryan Waldon.
Each flagpole sells for a couple hundred dollars, and the Waldons typically handle a couple orders each week, depending on the season. Over the past 11 years, Emily has made more than $100,000 in profits.
“Just fellow Americans wanting to show pride in America. They wanted what we had, the flagpoles, to show that they were proud also. It was a great coming together with the whole community being patriotic,” Emily said.
Emily plans on studying international business at college after finishing her senior year of high school. She’s still deciding where she’ll go, but she says wherever she goes, Flagpole Express is coming with her.
“I’m definitely going to keep with it as long as I possibly can. Maybe pass it down to my kids. It’s been great growing up with it.”
Garrett Tenney is part of the Junior Reporter program at Fox News. Get more information on the Junior Reporters Program here.
Read more: http://smallbusiness.foxbusiness.com/entrepreneurs/2012/07/04/american-pride-turns-into-profit-for-young-entrepreneur/#ixzz1zlRrHmsC
US Manufacturing Shrinks for First Time in 3 Years
by MAM TeamMon Jul 2, 9:05 PM UTC
Production and exports declined, and the number of new orders plunged, according to a monthly report released Monday by the Institute for Supply Management.
The slowdown comes as U.S. employers have scaled back hiring, consumers have turned more cautious, Europe faces a recession and manufacturing has slowed in big countries like China.
Lawmakers Push for American Flags to be 'Made in the U.S.A.'
by MAM TeamJuly 3, 2012
So ask sponsors of the All-American Flag Act, introduced in response to the $3.6 million in imports of U.S. flags, mostly from China.
The bill’s sponsors picked the eve of Independence Day to call on the House to pass a Senate-approved bill that would require the federal government to purchase only flags made entirely from domestic content.
It was not immediately clear why the bill has yet to come up for a vote in the House, which approved the measure in 2010. That bill never came before the Senate before the session ended.
Rep. Bruce Braley (D-Iowa), the House’s bill’s chief sponsor, said in a statement, “It’s time for the House to act.”
U.S. flag imports were valued at $3.6 million last year, with $3.3 million coming from China, according to the Census Bureau.
Currently, federal law requires that U.S. flags purchased by the federal government contain a minimum of 50% American-made materials. The legislation would require federal agencies to purchase only flags made entirely in the U.S. “from articles, materials, or supplies 100% of which are grown, produced, or manufactured in the United States.”
“In a time when we face economic hardship, it is critical to invest in the manufacturing base,” Brown said during Senate consideration of his bill last year. “There is no product that deserves a U.S.A. label more than American flags.”
A separate bill, the Genuine American Flag Act, that would prohibit imports for sale of foreign-made U.S. flags also has been introduced.
Google Tries Something Retro: Made in the U.S.A.
by MAM TeamPublished: June 28, 2012
The Google executives and engineers who decided to build the player here are engaged in an experiment in American manufacturing. “We’ve been absent for so long, we decided, ‘Why don’t we try it and see what happens?’ ” said Andy Rubin, the Google executive who leads the company’s Android mobile business.
Still, the project will be closely watched by other electronics companies. It has become accepted wisdom that consumer electronics products can no longer be made in the United States. During the last decade, abundant low-cost Chinese labor and looser environmental regulations have virtually erased what was once a vibrant American industry.
Since the 1990s, one American company after another, including Hewlett-Packard, Dell and Apple, has become a design and marketing shell, with production shifted to contract manufacturers in Shenzhen and elsewhere in China.
Now that trend may be showing early signs of reversing.
It’s a trickle, but some American companies are again making products in the United States. While many of those companies have been small, like ET Water Systems, there have also been some highly visible moves by America’s largest consumer and industrial manufacturers. General Electric and Caterpillar, for example, have moved assembly operations back to the United States in the last year. (Airbus, a European company, is said to be near a deal to build jets in Alabama.)
There is no single reason for the change. Rising labor and energy costs have made manufacturing in China significantly more expensive; transportation costs have risen; companies have become increasingly aware of the risks of the theft of intellectual property when products are made in China; and in a business where time-to-market is a competitive advantage, it is easier for engineers to drive 10 minutes on the freeway to the factory than to fly for 16 hours.
That was true for ET Water Systems, a California company. “You need a collaboration that is real time,” said Pat McIntyre, chief executive of the maker of irrigation management systems, which recently moved its manufacturing operation from Dalian, China, to Silicon Valley. “We prefer local, frankly, because sending one of our people to China for two weeks at a time is challenging.”
Harold L. Sirkin, a managing director at Boston Consulting Group, said, “At 58 cents an hour, bringing manufacturing back was impossible, but at $3 to $6 an hour, where wages are today in coastal China, all of a sudden the equation changes.”
The firm reported in April that one-third of American companies with revenue greater than $1 billion were either planning or considering to move manufacturing back to the United States. Boston Consulting predicted that the reversal could bring two million to three million jobs back to this country.
“The companies who are investing in technology in the U.S.A. are more nimble and agile,” said Drew Greenblatt, president and owner of Marlin Steel Wire Products in Baltimore, which continues to manufacture in the United States by relying on automation technologies. “Parts are made quicker, and the quality is better.”
Other factors are playing a role as well, said Mitch Free, chief executive and founder of Mfg.com, an electronic marketplace for manufacturing firms. He pointed to trends including distributed manufacturing and customization as playing an important role in the “reshoring” of manufacturing to the United States.
The biggest challenge in bringing manufacturing home has been finding component suppliers nearby. Industry executives note that the decision to stay in China is often determined by a ready labor pool and the web of parts suppliers that surround giant assembly operations, like the one that Foxconn, the manufacturing partner of Apple and many other big electronics companies, operates in Shenzhen.
The Nexus Q, which links a TV or home sound system to the Internet cloud to play video and audio content, contains almost all American-made parts. The engineers who led the effort to build the device, which is based on the same microprocessor used in Android smartphones and contains seven printed circuit boards, found the maker of the zinc metal base in the Midwest and a supplier for the molded plastic components in Southern California.
Semiconductor chips are more of a challenge. In some cases, the chips are made in the United States and shipped to Asia to be packaged with other electronic components.
Google did not take the easy route and encase the Q in a black box. The dome of the Magic-8-ball-shaped case is the volume control – the user twists it – a feature that required painstaking engineering and a prolonged hunt for just the right bearing, said Matt Hershenson, an engineer who helped design the Q.
At $299, the device costs significantly more than competing systems from companies like Apple and Roku. Google says this is in part because of the higher costs of manufacturing in the United States, but the company expects to bring the price down as it increases volume. The company is hoping that consumers will be willing to pay more, though it is unlikely that the “Made in America” lineage will be part of any marketing campaign.
Google uses a contract manufacturer to make the Q. Last week it was being assembled in a large factory 15 minutes from Google headquarters. The company declined to say how many people were employed at the plant, which can run as many as three shifts each day. However, during a brief tour, made with the understanding that the exact location would not be disclosed, it was clear that hundreds of workers were involved in making the Q.
It is the kind of building that was once common across Silicon Valley during the 1980s and even the 1990s. More recently, former semiconductor fabrication and assembly factories have given way to large office campuses that house the programmers who design software and support Web sites.
——–
Advanced Manufacturing Could Spark Next Industrial Revolution
by MAM TeamBy: Elizabeth Alterman | Special to CNBC.com
In June 2011, Obama launched the Advanced Manufacturing Partnership, a national effort to unite industries, universities and the government to invest in the emerging technologies that will create high-quality manufacturing jobs and bolster global competitiveness. He also announced an initiative to invest $500 million to help develop advanced manufacturing technologies and jobs.
How does advanced manufacturing differ from traditional factory output? Fred Wentzel, vice president of industry relations and workforce development at the National Council for Advanced Manufacturing, says the best way to explain the difference is to look at the definition developed by his former colleague Paul Fowler.
As Fowler explains it, advanced manufacturing harnesses the efficiency of mass production and marries it to the flexibility of custom manufacturing. The goal is to respond quickly to customer demand by using high-precision information technology. Wentzel says gone are the days when manufacturers would produce “X number whether there was a market for it or not.”
“We’re not in a mass production mode,” he says.
Wentzel notes that while advanced manufacturing is hard to quantify, it transcends all industries. Already pervasive, it is seen as a necessary tool for U.S. manufacturers under pressure from global competition.
“You see it at Boeing [BA 67.72 -1.89 (-2.72%) ] , at Pratt and Whitney. You’re seeing it in the auto supply industry; you see it in companies like Caterpillar [CAT 86.03 -1.59 (-1.81%) ], Johnson Controls [JCI 29.18 -0.96 (-3.19%) ] and Rockwell Automation [ROK 68.86 -3.65 (-5.03%) ]— anywhere where the primary task is to find a way to make something better, cheaper and with fewer people,” he says.
Wentzel adds it is not that companies are going out of their way to reduce their number of employees, but as computers and advanced technology enter the equation, the need for large amounts of laborers diminishes while the desire for a smaller, more skilled workforce emerges.
Obama, for his part, is attempting to incorporate advanced manufacturing into his goal of doubling exports by 2015 and expanding U.S. manufacturing. In February, he called on Congress to create an $8 billion “Community College to Career Fund” to be spent over three years to train 2 million workers for careers in high-growth industries such as advanced manufacturing.
Jeff Immelt, chief executive officer of General Electric, who heads Obama’s Council on Jobs and Competitiveness, explains in the March issue of the “Harvard Business Review” just how transformational advanced manufacturing can be.
Immelt says that while the focus remains on creating top-of-the-line designs and high-quality products, by updating a 25-year-old dishwasher line, the production team at Appliance Park in Louisville, Ky. was able to cut production time by 68 percent and reduce the space required by more than 80 percent.
By engaging the workforce at each stage from design to development to assembly, employees in Louisville have cut the time it takes to build a refrigerator—typically nine hours—in half.
Jim Davis, vice provost of IT and chief technology officer at UCLA, says technology and highly skilled workers go hand in hand.
“The shift toward smart manufacturing will transform the factory into a place in which people increase in importance and are actually interacting with the devices in much more strategic and informed ways,” he says.
Because manufacturing is becoming more automated and specialized, employers have begun to bring jobs back to the U.S. With smaller numbers of workers, the cost of labor becomes less of an issue, says Wentzel, and companies can start to focus on reducing other expenses.
The automotive industry is one that is experiencing a boom as a result of advanced manufacturing and, subsequently, many jobs that had previously been outsourced are returning to the U.S.
Earlier this year, Georgia Gov. Nathan Deal announced that Japan-based Toyota Industries will open a $350 million compressor production plant in Jackson County. The operation, known as Toyota Industries Compressor Parts America, TICA, will be located next to TD Automotive Compressor as the two operations complement one another.
Toyota will manufacture the main parts of vehicle compressors, which will be assembled at the TD compressor plant. Currently, the main parts of vehicle compressors are imported from Japan. Bringing the manufacturing right next door avoids costly shipping delays, something Toyota faced in 2011 when its tsunami shuttered factories.
Toyota also supplies parts to Chrysler, Ford [F 10.19 -0.37 (-3.5%) ], General Motors [GM 21.60 -0.60 (-2.7%) ] and other automotive companies. The Pendergrass plant, which is expected to open by late 2013, will create 320 jobs in the area.
Around the same time, Frank-Peter Arndt, BMW’s production chief, announced the company will invest nearly $900 million over the next three years in its Spartanburg, S.C., plant.
In addition, BMW will add 300 new jobs this year, raising production capacities up to 300,000 units. In 2011, the plant produced 276,065 vehicles for over 130 markets around the world, which represents a 73 percent increase over 2010.
By assisting U.S. industry in becoming more predictive, efficient and sustainable, advanced manufacturing can be transformational in offering a portal into staying competitive in the global marketplace while providing opportunities for skilled workers.
© 2012 CNBC.com
Manufacturing Reshoring, Trickle Could Turn To Flood
by MAM TeamJim Vassallo | Chelsei HendersonEmployment Spectator
202 S Lake Ave, Unit 250
Pasadena, CA 91101
When Whirlpool took the decision to assemble the products at home again, “there were a lot of high fives going around, that’s for sure,” Mr. Good says.
However, this brought home only around 25 jobs. The return of some production to the US is not creating too many jobs. It has its limitations. In the case of Whirlpool, most of the components of the mixers are still made abroad. They just could not be made cheaply enough in the US.
Earlier this year the President was very appreciative of a Master Lock company he visited in Milwaukee and applauded them for bringing back some work from Asia. Master Lock’s move had created a 100 new jobs. Otis Elevator Co’s relocating production from Mexico to South Carolina will result in an additional 360 jobs. Companies like Caterpillar Inc., General Electric Co. and Ford Motor Co., who have joined the bring-back-production to America bandwagon, will create a few thousand more positions.
Manufacturing employment in the US is showing signs of resurrection. The 35 percent decline between 1998 and 2010 has seen a growth of 4.3 percent and manufacturing jobs have increased by 489,000. This job-increase is owing to a buoyant economy and not because of reshoring of production.
Harry Moser, president of the Reshoring Initiative, a nonprofit campaigning to bring back manufacturing jobs, thinks that, in the past few years, at least 25,000 manufacturing and related support jobs have been brought back to the U.S. That is a miniscule number, in the colossal unemployment statistics, but Mr. Moser thinks that as more and more companies, assess that it is more feasible to manufacture within the country, the potential is enormous.
Manufacturers say that there are many reasons why they manufacture out of the US, taxes, regulations, government incentives amongst others. They say, that after their experience of manufacturing in Asia, there will be no sense in manufacturing shoes and clothing within the country.
The relocate production back to the US has become appealing to the manufactures, as the wage-gap between China and US has considerably narrowed. The drop in the US dollar has made US produced goods more competitive and increased gas prices has increase the cost of freight.
David Simchi-Levi, an engineering professor and supply-chain expert at the Massachusetts Institute of Technology, surveyed 105 companies early this year and concluded that 39% US manufacturers were contemplating moving some manufacturing back to the U.S.
However, China and other Asian countries score above the US on many fields. Expertise and supplier networks have become so deep-rooted that they have become unshakeable. Moreover, the US lacks skilled and technically competent workers and US corporate taxes are amongst the highest in the world.
Dr. Simchi-Levi found that companies are becoming more regions centric, Asian plants serve Asian customers, North American ones serve Americans.
Not all products can be reshored. Cort Jacoby, a supply-chain expert at Hackett Group, a consulting firm said, that producers most likely to be reshored are bulky items are heavy and huge items whose transportation freight would be high, things like heavy machinery. Other things could include expensive items, for fashion aficionados, whose taste change frequently, clothing and home-accessories for the elite and items that require health monitoring, like baby products. All these, Jacoby feels, are most likely to be reshored.
Justin Rose of Boston Consulting Group has conducted an interesting study that show the wages paid to Chinese laborers and compares them with wages paid in the US. Even though the labor costs have increased, China holds the upper hand in terms of labor costs. At Whirlpool’s Greenville plant a worker on average earns about $12.40 to $16.50 per hour, plus benefits. In China, the workers earn as little as $3.40 to $3.50 per hour.
However, the gap is narrowed, as Mr. Rose estimates, those workers in US, thanks to better technology and automated machines, produces three times as much as their Chinese counterparts.
Current trends suggest that U.S. consumers could see more products labeled “Made in USA” on store shelves in the near future.
How To Shop Locally And Save Money
by MAM Team@YahooFinance on Twitter, become a fan on Facebook
Often, the food you purchase will be high quality, organic and better for your health than processed foods. Plus, you’ll support your local economy. While you may believe that buying locally produced food is difficult, the option is available to you at numerous locations.
1. Taste and Nutrition
Locally grown food tastes better and is generally healthier than produce at national grocers. Because local fruits and vegetables are allowed to ripen before they’re picked, they are richer in nutrients than the standard grocery store variety. Most grocery store produce is picked before reaching peak ripeness and sits in storage and transit for a week, if not more.
2. Cost Effectiveness
There are fewer packaging costs, and since the food travels less it can be sold at a cheaper price. Plus, there aren’t any middlemen involved in the sale process.
3. Energy Conservation
By purchasing food locally, you are doing your part to decrease our nation’s reliance on oil. Food purchased at grocery stores travels an average of 1,500 miles – and when the price of oil spikes, you eventually see a price increase at the supermarket.
4. Environmental Impact
In addition to conserving energy, forgoing the purchase of food that has traveled great distances for locally grown produce lowers your carbon footprint. Furthermore, local farmers typically use fewer pesticides.
Where to Find Locally Grown Products
1. Farm Stands
Some farms have roadside stands to sell their products, but you can also purchase fruits and vegetables from a pick-your-own (PYO) farm. You’ll get the benefits of locally grown food, and enjoy being outdoors and picking the items yourself or with your family. Another option is to buy homegrown fruits and vegetables from a food cooperative, a grocery store owned and operated by its members. Co-ops typically have high standards of social responsibility, and supply local produce, as well as organic and fair-trade items.
2. Community Supported Agriculture (CSA) Farms
CSA farms are food networks made up of individuals who commit to support a local farming operation. By purchasing a subscription or share in a CSA farm, you will typically receive one box of seasonal fruits and vegetables per week during the farming season. At times, CSAs may also offer dairy and meat products.
3. Farmers’ Markets
If you’re lucky enough to have one close to you, this is probably the best option for acquiring locally grown food, especially if you’re constantly on the go. Farmers’ markets feature a wide variety of fruits and vegetables, and typically offer much more than your average grocer. The prices are competitive and the level of quality is equal to, if not better, than foods at the grocery store.
The Effect on the Local Economy
Purchasing locally grown food supports the farmers in your area. The Department of Labor reported 24 million jobs in the U.S. rely on food and fiber industry, so keeping farms in business is important.
Furthermore, when buying from a national grocer, only 18 cents of every dollar goes to the farmer, with 82 cents going to the middlemen. Spending your money locally pumps revenue into your state’s economy, keeps dollars circulating in your community, maintains employment for local residents and can help to create more jobs.
The Bottom Line
In some instances, you will find that buying locally grown food is a little more expensive than food purchased at a national grocer. However, the extra costs are negligible when you consider that the benefits far outweigh slightly increased cost. Buying local benefits your health, your community, and the planet, and will make your taste buds happy. Plus, you can also develop a personal relationship with the farmer who grows the food that you and your family eat, and learn more about the process of food production.