The old business school motto, doing more with less, can have some interesting applications. American manufacturing is going through a renaissance of sorts. Across many industries there are substantial efforts to bring more manufacturing back to the US.
A lot of it is precisely ‘doing more with less’. How do we make the same quality of parts at prices low enough to compete with foreign competition? It’s not easy when the typical pay scale for manufacturing labor is $8 a day in some parts of the world.
There are a couple of obvious components to price competition that don’t get a lot of attention. Scrap rates and delivered cost. When a US company buys parts from offshore, any defective parts are very costly. The direct shipping cost, duties and processing fees are additional and can be 10-15%.
During my years at Rockwell Automation, we investigated the cost of selling US products in different parts of the world. Depending on where in the world we are talking about, the shipping and logistics can accumulate between 25 and 40% additional cost to the product being sold.
So the cost of scraps and logistics are the minimum cost hurdles for companies seeking to export their products to the US. Low cost producers have to make parts cheaply enough that the landed cost and scrap rates cost out less than the price of producing them in the US.
Doing more manufacturing in the US requires finding creative ways to lower costs. That is the second area that is undergoing change. American manufacturing technology is finding ways to reduce machinery and process costs. And this area of effort may provide key strategies that will help the US gain back ground in the pursuit of more world class manufacturing.
Innovation processes like additive manufacturing allow fabrication of metal parts with no machining. For higher levels of precision there are new machine tools that can do final machining to less than 0.001″ accuracy and the costs of machine tools are lower than ever. These are the keys to producing high quality parts at lower costs.
There are unique mechatronic solutions that can improve machinery performance across a wide range of applications. The Acme screw which is very inexpensive, has limited accuracy but plenty of torque handling capability. What happens if you can add a very inexpensive linear feedback technology to the simple low cost Acme screw? You get a really high resolution linear motion system that is very inexpensive.
The great news is that these products are currently available. And that means that making better machines that make better parts at lower cost is practical, achievable and there are no technical challenges. Common off the shelf parts will get it done.