Letter To The Editor : Offshore Manufacturing Moving Back?

Dear Editor:I own a small company (30+ employees) that applies robots (ABB) and automation to packaging, picking and material handling applications.‑

This morning, ironically, while reading your recent articles on outsourcing (Automation World, August 2006, p. 29 and p. 62), a customer called to check on the status of trials we were running on his products. He is trying to justify moving production from Mexico back to the Midwest by using robots instead of manual labor.‑When I asked how he is going to financially justify this, there was silence, so I threw out some of my guesses—labor savings (slim - 40 Mexican workers will be displaced by maybe 20 robots), rising offshore labor costs, less inventory, less WIP, less transport costs and border issues, higher quality.‑

He agreed with all of those reasons.‑It is possible to provide a pure financial justification to move the offshore production back to the United States but it takes a broader look at the true cost of manufacturing offshore vs. the United States.‑I think the advances as well as acceptance of new technologies is helping bring back manufacturing (and some jobs) to the U.S.‑In the this case, we are not bringing back all of the manual labor, we are adding some technical and support positions to keep the robots running.

In the last 6 months, we have seen inquires from the mid- to large-size companies increase, to do the same—bring back manufacturing to the United States.‑I think this is the start of a huge trend which is comprised of:

1. ‑Manual labor moves from U.S. to lowest cost labor areas globally

2. ‑When technology becomes available to remove labor, manufacturing stays in the U.S. or returns to the U.S. from offshore

3. ‑Final assembly and package closer to
the customer using robotics and advance manufacturing.

The typical capital spending timeline for our customers is 12 to 24 months, so time will tell if this is going to be a turning of the tide or just a few smart manufacturers.


Thomas J. Doyle, P.E.. President QComp Technologies Inc. Greenville, Wis.

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