Are Americans Ready for a Shift in Strategic Manufacturing?

Rising labor costs in countries where US manufacturers have outsourced over the last 50 years are rising while technological advances are decreasing the cost of actual production. With reduced transportation and delivery costs, many companies are reevaluating the possibility of bringing production back to the US by taking advantage of lower labor costs associated with advances in automation and robotics technology.

Manufacturers investing in new technology can see as much as a 70% increase in productivity with a single new robot, which may only cost the equivalent of one employee’s annual salary. Adding sensors into new equipment also contributes to higher performance levels, especially when coupled with IoT (Internet of Things) connectivity. The bottom line is that labor costs are no longer the deciding factor in where manufacturing should occur.

America loves a disruption to the norm. Henry Ford is always a favorite with his assembly line, wage changes and first affordable V-8 engine. Ford looked ahead and that is what put him ahead. Other car manufacturers are learning from Ford’s example. Tesla has created thousands of jobs with their electric vehicle production, which also harnesses clean technology and renewable energy, and predicts domestic production will double in the next 2-3 years.

A generation of traditional manufacturing veterans is moving into retirement. An investment in the education of young people to gain hands-on experience with new technology may be the nation’s best bet to fill the technical jobs that will inevitably be created by companies embracing new technology.