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My Opinion on Manufacturing Coming Home

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Ann R. Thryft
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Re: Oxymoron of politician and keeping a promise
Ann R. Thryft   2/5/2013 12:35:40 PM
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Good for you, Nancy! I try to do the same as a consumer, and better yet, to shop locally. But living in a rural area means that a lot of things I want to buy aren't available locally. That, combined with the "volume is king" attitude of many chains with local operations means I end up buying more and more stuff online. That "volume is king" attitude makes no sense on the local small scale. Local businesses should be tailoring their wares to local shoppers. Many of the independents do, but not the chain stores.

Nancy Golden
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Re: Oxymoron of politician and keeping a promise
Nancy Golden   2/5/2013 12:46:47 PM
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That's great that you shop locally, Ann - we try to do the same. My husband's father owned a bicycle shop so we have a deep appreciation for people supporting local businesses. There is always the temptation of going into a brick and mortar store to gather information from the expertise of the employees working there, and then leaving without purchasing anything and buying the same product for less online. We don't mind paying more (within reason) because we know we are supporting their business and they provided us with a service in addition to the product, with their time and knowledge. Unfortunately with the advent of online shopping that is both convenient and often cheaper because they don't have a real storefront, these small business are becoming fewer and fewer...and we are losing something irreplaceable in the process.

Dave Palmer
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North America, not necessarily U.S.
Dave Palmer   2/5/2013 7:55:27 PM
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I think there is a growing consensus among business leaders that it's important to have an agile supply chain -- and that ocean freight is not agile.  Relying on large shipments of parts that come via container ship from another continent makes it difficult to respond quickly to a changing business environment.  There is a big advantage in being close to your customer base.

This is causing many companies to refocus on North America -- but not necessarily the U.S.  For instance, Cardinal Health, a major medical supply manufacturer, recently decided to relocate one of its assembly plants from the Chicago area to Mexico.  This provides them with continued proximity to U.S. customers, and increased proximity to emerging markets in Latin America.  Probably most important from Cardinal's point of view, it lowers their labor costs.

U.S. manufacturing has a lot of potential advantages (including quality, as Nancy pointed out).  But, unfortunately, many corporate leaders still don't know the difference between price and cost.  They haven't learned that lo barato sale caro ("cheap" is expensive).

The U.S. will never be able to compete as a "low-cost country;" at least, not if we want to maintain our standard of living.  The only way the U.S. will be able to compete as a manufacturing country is by providing a better overall value than other countries.  This means world-class quality, among other things.

Over the next few years, we'll see whether or not we're up to the challenge.

apresher
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Manufacturing Coming Home
apresher   2/6/2013 2:11:06 PM
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Rich,  Excellent.  This is a very important story that we need to continue to cover. Also very good information in the McKinsey report.

Ann R. Thryft
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Re: Higher fuel costs a factor?
Ann R. Thryft   2/6/2013 2:50:04 PM
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Agreed, Chuck. They have access to a lot of data that other research firms don't, and it's high quality stuff, as are their practices.

Cabe Atwell
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Re: Higher fuel costs a factor?
Cabe Atwell   2/6/2013 4:38:28 PM
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I routinely have parts made by machine shops, as well as build them on my own. I recently sent for RFQ, a set of very simple parts to a USA based machine shop. They returned a quote that was so outrageous, it is making think China is the only way. For example, that same USA based shop quoted me a part in the past around $13 USD, where a China company quoted me $5 USD. I went with the USA shop, since I want to support domestic growth.

But with the most recent quote, I have no choice but to go China.

 

Most USA shops I send RFQs to give me high priced quotes. Sometime, their prices are so high that they refuse to quote me at all. It isn't worth their time.

 

Until prices come down domestically, decline is the only direction.

 

C

Ann R. Thryft
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Re: Higher fuel costs a factor?
Ann R. Thryft   2/7/2013 12:16:43 PM
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I wonder how much of that difference might be due not only to lower labor costs (which we, of course have continued to subsidize by sending our business there) but also to a different business model. I'm hypothesizing like crazy here, but I wonder if US machine shops and material suppliers that are used to supplying large companies simply aren't set up for pick and place and shipping, etc. in small quantities to individuals such as yourself. And if companies in China are, for several reasons I can imagine along the way from manufacturing to shipping.

tekochip
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Sneaky Sourcing
tekochip   2/7/2013 3:16:16 PM
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Along with Cabe's comment, I try to keep sourcing in the US.  Recently I ordered some blank boards from a company in Wisconsin, but the parts arrived via China Post.  The Wisconsin address is just a front-end for web ordering at a Chinese board house.


Charles Murray
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Union elections
Charles Murray   2/7/2013 8:01:07 PM
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With FoxConn holding union elections this week (as reported in the UK Telegraph), maybe there is a glimmer of hope for "manufacturing coming home." 

http://www.telegraph.co.uk/technology/apple/9847109/Apple-manufacturer-Foxconn-to-allow-union-elections.html

Nancy Golden
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Re: Union elections
Nancy Golden   2/8/2013 10:16:39 AM
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I hate to be a pessimist, Charles - but it looks like it is a move to satisfy those looking in, without real substance. I hope I'm wrong...some of the conditions I have heard from colleagues visiting factories there are terrible.

It also mentioned that Foxconn said it plans to manufacture some Macs here in the U.S. - That would be interesting to follow and see if it really comes to fruition - that indeed would be manufacturing coming home.

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