A water heater, called the GeoSpring, turned things around. After running the numbers, GE executives decided conditions were right to bring manufacturing of the GeoSpring back from China. They reopened a long-closed building at Appliance Park and started assembling teams. Design engineers, manufacturing engineers, line workers, marketing and sales professionals, and more met in a big room and started talking about how they were going to make the GeoSpring here. Their first “big” discovery: the water heater’s current design was such a mess no one in Kentucky wanted to make it.
The US-based designers were so far removed from the Chinese-based manufacturing workers, they had no idea what it took to bring their designs to life. As an example, the original water heater design had a maze of tubes at the top. The manufacturing workers were supposed to weld the tubes together. But in reality, the tubes were arranged in such a way, that welding wasn’t practical.
The team decided to completely redesign the GeoSpring. In doing so, they managed to eliminate one of every five parts, including the tangle of tubing at the top, and cut material cost by 25 percent. Labor costs went down as well. A water heater, which took 10 hours to build using the old design, was down to two when made the new way. By bringing everyone together, GE lowered its part count, material cost, and labor requirements. At the same time, it made a better, more reliable water heater, lowered the sales price, and shortened the heater’s time to market.
Even with these benefits, experts say it’s unlikely all manufacturing will return. The Boston Consulting Group (BCG) says despite today’s more favorable US manufacturing environment, some categories are likely gone for good. This includes high-volume, mostly low-value products, such as apparel, shoes and accessories, textiles, and fabrics, which require a high amount of labor to produce.
The categories which BCG says have the greatest chance of returning to the US are average-volume, mid-value products that require a moderate amount of labor to produce. This would include things like appliances and electronics, fabricated metals, transportation goods, and machinery -- categories that will benefit from strong collaboration between design and manufacturing engineers.
Though these categories are at a tipping point -- there’s a good chance they could come back, but an equally good chance these “middle class” jobs will remain offshore -- US manufacturers need to work through some issues if these categories are to “tip” in our favor.
The first, and some say the biggest issue, has nothing to do with the economics of manufacturing here or there, but with people. A good example of this is seen at
Hypertherm, a manufacturer of plasma, laser, and waterjet cutting systems. The company was once able to find a healthy supply of printed circuit board and component producers for its cutting systems among fellow New England companies. Today, however, those companies -- and people -- are no longer there. They are retired or have been retrained to do other jobs.
The people gap is apparent in other areas, as well. Companies have jobs and want to hire people, but can’t find workers. A recent study found that even with high unemployment, 600,000 skilled positions are going unfilled because companies can’t find the machinists, operators, and technicians to fill them.
Michelle Avila is public relations manager at Hypertherm Inc.