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Is there life in Western manufacturing?

30 December 2014 No Comment

canstockphoto8168601It’s easy to blame the recession that hit towards the end of the last decade for the decline in manufacturing in the West, but if you were to be honest, you’d look back over several decades and note that manufacturing has had a tough time of it for many, many years.

All economies expand and contract in cycles, depending on a range of circumstances in the global marketplace. Though you might be forgiven for thinking that the West, and the US in particular, would never really drag its manufacturing structure away from first base, you’d be wrong. The West, and again the US in particular, is seeing a manufacturing resurgence that is helping to power the economy ahead.

What has made the difference?

From unworkable to unstoppable?

There’s little doubt that many people thought the Western model of manufacturing had become unworkable. As outsourcing grew apace it was to the detriment of homegrown firms involved in manufacturing, and especially for smaller businesses. Many jobs were lost as cheap labor costs overseas coupled with hi-tech manufacturing in countries such as China and India meant companies thirsting after the bottom line went for cheap.

Now, there are a number of factors at work that are driving the manufacturing comeback and putting the West back on the road to growth.

Labor and fuel costs

Labor costs have had significant increases in countries that many manufacturers used to outsource to, and there is now the opportunity for businesses to recruit American workers and retain them while still maintaining viability. Oil prices have plummeted recently – you may know Russia is in serious economic trouble due to this – but the US had reduced its reliance on imported oil by investing heavily in shale gas production throughout the country, thus vastly reducing transportation costs with the knock-on effect of lower domestic manufacturing costs.

Supply chains

Global supply chains are always prey to disruption or breaking down due to instability in many parts of the world. There are geographical and currency risks, when exchange rates fluctuate, so by getting supply chains reshored to the US, a large amount of the previous risk can be cut out.

New automation technology

Many businesses and consumers have had enough of poorly manufactured goods, even if they may be cheap or appear to be a bargain. People are looking more and more for high quality goods, skillfully crafted and made in America. New automation technology has been able to deliver an accuracy and precision that, especially for startups, is affordable and produces the high quality products and services demanded by an increasingly sophisticated market.

Transducer Techniques are a case in point. Transducers convert energy such as pressure or temperature into a readable signal, allowing workers to detect instantly if there is any flaw in the manufacturing process and rectify it immediately, contributing to accuracy and precision that are prize assets for any manufacturer.

So if anyone asks you that question – “Is there life in Western manufacturing?” – you can just turn round and say: “You betcha!”

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