This May has had some great moments, and the Navy SEALs’ heroic efforts at that mysterious, now famous compound in northeast Pakistan is just one of them.
Some moments have been bittersweet. The Monday after tornadoes hit Alabama, I called one fabricator there who hadn’t received my e-mails; the servers were knocked out. Several families had lost their homes, but all were pulling together. The morning I called, power was finally restored, which meant shop personnel could tackle the backlog and gradually return normalcy to the shop floor.
Another moment (albeit a far less emotional one) came when the Boston Consulting Group released a study predicting a manufacturing renaissance during the next five years. Although the wage difference between the U.S. and China remains significant, it’s no longer staggering. A few years ago companies saw the insanely low labor rates in Asia and thought outsourcing was a no-brainer. In 2010 the Chinese labor rate crept up to 31 percent of the U.S. rate, and the people at BCG believe the rate will be at 41 percent by 2015.
This means companies now look not just at labor but at factors that domestic manufacturers have been preaching for years: quality issues, distance, language barriers, and other supply chain complexities. Outsourcing manufacturing overseas is no longer a no-brainer, especially when a fabricator down the street can do the job better and deliver just what companies need, when they need it. (For more insight on this, see comments from my colleague Vicki Bell, both on her blog and e-newsletter.)
One of the best moments for me this May happened in a small office behind several laser cutting centers churning away flat part profiles. This was at Arin Inc., a small shop north of Detroit that offered me, in a sense, a walk through the history of flat part blanking. At one end of the shop were several old mechanical presses. Then there was the toolroom--and a history lesson. Arin COO Brian Kipke showed me the company’s traditional steel rule dies, complete with wood backing. On the wall in another room were rows of these tools, still used after all these years. If a company needs a certain volume of flat parts, and the die is sitting ready, using the old “steel rule standby” remains the most cost-effective way to finish the job.
In the next room sat Arin’s future. Several laser cutting machines processed components with complex contours. Next to one system were precision-cut stacks of tailor welded blanks with a step between the two metal thicknesses in each blank. The operator set up the laser to cut parts so that step would align perfectly with other components--not an easy task.
Behind this machine, in a small, wood-paneled office, is where I met Steven Ross, a plant supervisor who less than a decade ago was sweeping the shop floor and moving material. Still in his 20s, he explained not only the intricacies of a high-mix, low-volume laser cutting operation, but also the history behind steel rule dies, how they worked, and how they helped build the company.
That same week I attended the Advanced Laser Applications Workshop (ALAW), where some of the laser industry’s best manufacturing minds meet to discuss the latest trends--from heavy-duty, hybrid laser-arc processing to 1-micron-wide fiber and disk laser beams to nanometer-scale green lasers. During those conference presentations, my mind kept straying to Ross at Arin. His directness epitomized the fabricator, and the 18-person fab shop he worked in epitomized the country’s small job shops, which really are the backbone of the manufacturing economy.
In the decades to come, the lasers discussed at ALAW will wind up on those small shop floors. And people like Ross--young manufacturing professionals decades away from retirement--will use these technologies to their fullest potential. When they do, I think it will help the Boston Consulting Group’s vision of a manufacturing renaissance become a reality.
About the Author: Tim Heston
Custom metal fabrication offers a wide variety of components for a wide variety of industries, that's why I think so many of the companies in the industry are holding strong even in these difficult economic times.