Aug/Sept 2015

You’ve probably heard it or read it in articles before, but I am going to say it again; it’s time to build a more nimble product development pipeline. Oddly, years ago, even though we wouldn’t say it, many manufacturing executives and politicians would wince at the thought of what it would cost to retool existing factory lines.

Let’s face it, up until recently, tooling a plant could easily take years, not to mention cost millions. In a down economy where jobs are scarce, resources are minimal, and people are being outsourced, it just hasn’t been feasible for most companies to even consider, let alone reconsider, all the options.

Hello technology. With the birth of such movements as maker and digital manufacturing, manufacturers are rethinking their position and they are tapping their whole new world of innovation. They are discovering a birth in manufacturing that can help them revitalize not only their plants, but the mass production market in general.

As someone who really understands the Made in America slogan and who championed the cause back in 2004 with my own book Mending Manufacturing: How America can manufacture its survival, I am thrilled to hear and see so many companies rethinking their strategies when it comes to building and assembling products in the U.S., while additionally still working with global materials.

If you haven’t paid much attention or do not understand the crisis in American manufacturing, let’s take a step back and first talk about how manufactured goods have shifted to other countries.

The United States began to face a manufacturing emergency more than a couple decades ago. This resulted in America struggling to maintain a strong manufacturing base.

There has always been the belief wealth is created in only three ways—through agriculture, extraction (mining, drilling, fishing, etc.), or manufacturing. Beyond these three activities, all other economic activities transfer wealth, but don’t necessarily create it.

For the U.S., it has been losing its ability to create economic wealth through manufacturing. U.S., factories have been hemorrhaging factory jobs that have greatly hindered the economic health and prosperity of the nation.

Let’s look at this trend from a statistical perspective. From 1992 to 2001, about 90% of America’s most important manufacturing industries lost significant marketshare to goods produced overseas.

This trend in the mainstream media has been referred to as globalization. During the past couple of decades, we have witnessed the harsh reality of losing many productive U.S. manufacturing jobs.

As a result, manufacturing in the U.S. dropped considerably and manufactured products still remain relatively low. We have become a society that imports more than we produce. Simply speaking, we no longer are known for how we make stuff and things.

At last count, in the past 20 years, 18 of the 22 major manufacturing sectors, as defined by the U.S. Dept. of Commerce, have developed trade deficits. We have seen a rapid decline in employment of offshore production at every aspect from automotive, apparel, textiles, pulp and paper, petroleum, food and beverage, electronics, and the list goes on and on.

For years many ignored the harsh realities of what was happening as jobs disappeared. Companies focused on profits, and as a result, that meant closing plants within the U.S., and opening up operations overseas with cheaper, less expensive labor, often at the expense of quality.

This is a topic that has been debated by many for years, and it’s only recently that companies have been rethinking the true costs of outsourcing. And as time has progressed, this path taken has proven not to be as profitable as many corporations had anticipated.

Big box retailers are now demanding more out of their partners. They wanted quick turnarounds and overseas suppliers have not been able to fulfill these requirements. At the very least they have not been sustainable. This in turn forced many manufacturers, such as innovative home appliance makers, tool makers, and the like to reconsider their overseas strategies.CW_n32_Editorial_chart

Now we have begun to see a shift back to the U.S. The U.S., which was once a manufacturing powerhouse, many believe will once again thrive due to innovation as a result of the IoT (Internet of Things), advanced robotics, and the maker movement in general. Several large U.S. corporations have already shifted their thinking and have started the effort all over again. And that means onshoring. Ultimately, that means bringing manufacturing stateside. Manufacturers who never thought they would produce goods here in states have or are rebuilding highly automated factories and in other advanced distribution centers that require the human touch.

Looking back, in 2004, manufacturing used to make one-fifth of the gross domestic product (or 20%) and was once responsible for 15 million jobs in the U.S. It also supported another 8 million jobs in other sectors, and it accounted for 62% of all research and development. Today, the U.S. manufacturing is responsible for 12% of the GDP (gross domestic product), and 12 million jobs in the U.S.

While manufacturing has steadily declined, it is still critical to the growth of the economy. Therefore, when I visit a factory today I can’t help but get excited by all enthusiasm of the employees. I can’t help but get charged up by the innovation that is coming out of the younger and older minds collaborating to bring better quality products to market once again.

As I have said before, the first step to rebuilding our manufacturing base is greater public awareness. We need to reach our youth. These young minds will lead us into a stronger and brighter future, as long as we show them all the opportunities that manufacturing affords.

It’s no wonder manufacturing will take an army of inventors so it can strut its symbol of American innovation, giving new meaning to the phrase built in the USA.

It’s making us all have pride in what it means to have products that say built in the USA.

And it’s for that very reason it’s time to recognize that manufacturing is vital to providing economic wealth for this country.

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