Manufacturing in America far from dead, industry experts maintain

While many Americans believe that the United States has lost its longtime global edge in manufacturing, one prominent supply chain management consultant maintains that global competition from emerging markets has actually sharpened it.

“Boeing and Caterpillar are among several major multinationals bringing manufacturing back to the U.S.,” noted Richard Thomspson, executive vice president of Jones Lang LaSalle IP, Inc., in Chicago. “And there’s a reason for that.”

Thompson said that lean principles in manufacturing operations and other practices used by U.S. companies have boosted productivity by eliminating wasted effort, streamlining processes and increasing workflow velocity.

“Hytrol, a leading manufacturer of conveyor equipment, has eliminated more than 80 percent of work-in-process inventory and reduced scrap and rework
by more than 30 percent, enabling it to compete with lower cost global competitors,” said Thompson.

“Made in America – A Case for Manufacturing,” is a paper written by Thompson, who also serves as Jones Lang LaSalle’s research group head of supply chain and logistics solutions for the Americas.

In an interview with SCMR, he added that there are many other examples of U.S. manufacturers which have pulled back their off-shoring operations, or never left to begin with.

“A solid economic foundation is an important strength, but manufacturing site selection decisions all come down to return on investment,” he said.

Thompson said that there are numerous trade-offs to consider, however. These include total delivered costs, proximity to customers and suppliers and supply chain infrastructure.

“Investments are forthcoming in both the public and private sectors,” he said. “President Obama has proposed creating an infrastructure bank in his 2012 budget as a centerpiece of a 10-year, $640 billion plan for upgrading and rebuilding 150,000 miles of roads, bridges, transit systems, reconstructing 150 miles of runways, and constructing and maintaining 4,000 miles of rail lines.”

The BNSF, one of the largest U.S. railroads, plans to invest $3.5 billion in 2011 in infrastructure improvements including network upgrades and locomotives, Thompson also pointed out.

The perception that the United States’ manufacturing superiority is forever shattered, must be addressed,” he said. “There are too many exceptions to this to consider, and we have every confidence that the United States will increasingly look more attractive from a manufacturing perspective.”

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