At the last FABTECH® show, I ran into an engineer who works for GE Appliance & Lighting, looking for products that would speed that all-important art-to-part time--that all-important product-development time. Their comments make sense in light of recent growth of the company’s Louisville, Ky., Appliance Park. After years of decline, the massive industrial campus has njoyed a welcome rebound in recent years, as described in great detail by The Atlantic magazine last month.
Posts Tagged ‘manufacturing supply chain’
By: Tim Heston
The mainstream press and pundits now seem to be realizing that globalization isn’t about finding cheap labor. No, it’s now about something that on the surface is a lot drier and more complex: the manufacturing supply chain.
New York Times reporter David Barboza--who earlier this year wrote the expose on iPhone production at Foxconn--put it this way on NPR’s This American Life: “Some say that you could build an iPhone in the U.S. for just $10 extra a phone, if you were paying American wages. But labor is such a small part of any electronic device, compared to the cost of buying chips, or making sure you have a plant that can turn out thousands of products a day, or making sure you can get strengthened glass cut just right within two days of the project being due.
“Labor is almost insignificant,” he continued. “What’s really important are supply chains and flexibility of factories. You want a plant that’s located right next to the screws, so that when you need a small change to that screw, you can go over there and say, give it to me in six hours, and they can say here you go. If that factory were in another state or continent, it would take two weeks. It’s the flexibility of the Chinese manufacturing system.” Sure, U.S. manufacturers can offer some incredible flexibility--but generally not to the scale that China now offers.
The show’s host Ira Glass then stuttered a bit. This was a grueling episode for him. The entire hour essentially was a retraction for an earlier show about Mike Daisey, who has a one-man show that details his trip to Foxconn factories. When performing, Daisey opines about bad working conditions in China. But his show, it turns out, isn’t entirely factual, which some may feel is fine for performance art, but not for journalism. Well, at least good journalism.
After his idiosyncratic stutter, Glass said he felt guilty for owning and using an iPhone. Should he feel bad? Should all of us?
By: Tim Heston
Maybe those long lines of attendees at the FABTECH trade show last year weren’t red herrings. The Institute for Supply Management reported significant growth in manufacturing last month, news significant enough to send stocks skyward.
News coverage has been cautious, especially considering what happened 12 months ago. Stocks rose in January and throughout the first few months of 2011, only to plummet as the economy experienced one black swan event after another. Japan’s earthquakes and flooding in Southeast Asia and here in the states disrupted supply chains. The Arab Spring and European debt crisis has continued to add to our uncertainty, as well as, of course, that stubbornly high unemployment rate. So yes, if I were reacting to today’s market rise, I’d be glass-half-empty, too.
But U.S. manufacturing still seems to have a lot going for it these days. China’s government announced on Dec. 1 that its manufacturing was contracting just as labor disputes were expanding. The Asian factory worker is unhappy, and justifiably so. Ian Spaulding, managing director of the consultancy Infact Global Partners, had some insightful remarks for Bloomberg about China’s sputtering manufacturing engine. “In an environment where you have 10 to 20 percent turnover a month, managers start thinking of workers as machines. That creates resentments on both sides.”