“Be adept and adapt” has become the new mantra for many manufacturing communities. This approach is alive and well in Montgomery County, Pennsylvania where a group of manufacturers and local officials recently gathered to discuss how public and private resources can help support this vital industry sector.
On Friday February 13th, there was a line of 27 container ships anchored at the ports of Los Angeles and Long Beach wanting to be offloaded. By Saturday, Valentine’s Day, that number had grown to 32. This bottleneck is primarily the result of a nine-month labor contract dispute between the union representing the longshoremen and the ship owners. The ship owners are accusing the union of work slowdowns. To retaliate, the PMA (a trade group representing the ship owners) has canceled night and weekend shifts to avoid paying overtime to the workers. It is estimated that the economic cost of one day of a lockout could cost $1 billion dollars. If the dispute is allowed to escalate, shutting down all 29 west coast ports, the economic consequences could be substantial. These ports handle approximately $1 trillion worth of cargo each year. Los Angeles and Long Beach are the largest, handling 40% of all incoming cargo containers.
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Cost is not just the final price you pay for a part. Cost also includes shipping, time to market delays, quality control checks as well as labor. Cheap foreign labor is becoming more expensive. Offshore suppliers face a more demanding workforce. And, today’s consumers are demanding that suppliers provide improved working conditions and pay. All of this is driving up the unit cost of goods sold.
In the 1900s, the United States was booming. Companies set up shop on American soil and hired well-educated, motivated American workers to manufacture and sell their products. More recently, free trade and an ever-globalizing economy have encouraged American businesses to move their manufacturing facilities overseas, where they can employ less expensive labor with fewer regulations and ultimately sell their products to the end consumer at a lower price. At first glance, lower prices appear to be a good thing, a way of getting more products into the hands of more people more rapidly. However, a closer look reveals there are still many benefits of manufacturing in the U.S. vs. overseas.
American manufacturing is getting a great deal of attention these days. Consumers are seeking out American-made products. Producers are re-shoring their manufacturing back to the states. Educators, students, and adults are looking seriously at STEM manufacturing careers to provide a stable and secure future.
Article originally posted on www.toybook.com , May 14, 2013
By Howard N. Aronson, Managing Partner, Lackenbach Siegel LLP
Like the proverbial child who runs away from home only to return before nightfall, an American toymaker is bringing most of its manufacturing back to the U.S.—after more than a decade of outsourcing in Asia. The decision of K’NEX Brands, a family-owned maker of plastic building toys, to boost manufacturing at The Rodon Group, its Hatfield, Pa. plant, is only one example of a major trend. Persuasive factors leading to the ultimate decision included quality control, overall costs, timeliness of deliveries, and intellectual property issues. Many are following the lead of K’NEX and rediscovering that home sweet home is the best place to make and distribute products after all.
Many products that are a part of everyday life go unnoticed, either because they are components of larger items or they are so commonly used that little thought is given to their existence. Items manufactured by plastic injection molding often fall into this category. Without them however, life would be void of a number of modern conveniences.
By looking around at home or business, one can better understand and appreciate the items that exist because of the injection molding process. Screwdriver handles, tool box casters, and plastic fasteners are likely to be found in the average garage. Appliances and plumbing systems normally include plastic components that are not seen. Visible items include toys, eyeglass cases, handles, and knobs. The list could go on and on but enough examples are given here to illustrate the point.
Some manufacturers have an entrenched belief that they must produce every part of a final product. This could be a reflection of the fact that they have older, maybe underused equipment on the shop floor or simply a long history of a process they feel works for the organization.