Manufacturing Economy

This past week, I was interviewed on CNBC for MFG.com, regarding the emerging trend of backshoring manufacturing production to the U.S. from low-cost countries. Here's the video:

There's been more action on the backshoring / reshoring / onshoring front this week, as more U.S. and western manufacturing OEMs are not only rethinking their extended supply chain decisions - many are acting by taking a hard look at domestic suppliers and shops.

I spent an awesome 45-minutes on the phone today with Johannes Schmoelz, sales manager, all around cutting tools guru and drag racing fanatic at K&Y Diamond, Ltd. K&Y is a unique Canadian manufacturer for a number of reasons, and its success offers all North American small- and medium-sized manufacturers (SMMs) some strong medicine in the way of inspiration.

In this video, Cliff Waldman, and economist with the Manufacturer's Alliance, is interviewed about why companies like Caterpillar and GE are reassessing their original offshoring decisions based on total landed costs - extended supply chain, logistics, intellectual property protection, training and other unexpected costs. More and more companies are finding that onshoring or backshoring production and rethinking the US as a production platform actually save money.

A recent article that advises Buyers and sourcing professional on the challenges of offshoring without the proper due diligence can also help suppliers and small- and mid-sized manufacturers (SMMs) construct a strong case for "backshoring" work nearer to a Buyer's core.

Since the economic downturn (or recession, or Great Recession, or whatever we're calling it) made us all victims, I've watched the traditional media, bloggists, the Twitterverse and every pundit with a virtual bullhorn jump on any uptick in performance, productivity or alleged economic  improvement in the US like Ozzy on a dove's head.

I wish we'd just stop it.

For one, we're not out of the woods yet. Employment, housing, commercial real estate, credit and any number of economic sectors haven't shown enough resilience to generate strong optimism.

In a post over at SpendMatters titled "Will a Return to Automotive OEM In-Country Sourcing in the UK Signal Something Larger?" the esteemed Jason Busch riffs on a study he found from across the pond that shows UK automotive OEMs are showing a renewed preference for local suppliers.

Over this past weekend, Kia opened a new manufacturing plant on 2,200+ acres in the rural community of West Point, Georgia. According to Kia's Web site, the plant will produce 300,000 cars annually, initially employ over 1,200 (with total direct employment expected to exceed 2,400 by the end of 2010), and support approximately 7,500 local suppliers.

Technology has changed our society in may ways. Think for a moment about dark room technicians and photo film development. Just a few, short years ago this industry generated billions in revenues, employed thousands and sustained some nice-sized communities (i.e, Rochester, NY).

But who takes film to be developed these days? Anyone with a digital camera and computer can take, upload, process, customize, crop, and share photos of extraordinary quality in a matter of moments. The technology is inexpensive, easy to use, and it displaced or upturned whole industries in the process.

Oh, yeah ... it's all over the news. We love to watch our heroes get torn down, don't we? Whether it's Tiger or Toyota, we can't turn away. Our heads say "calm down," but our curiosity says "click that link." We follow accelerators, brakes, floor mats and - ahem - other indiscretions as though we're somehow above it all.