COVID-19 may have just changed everything… again.
Last year I had a conversation with a friend that helps companies get their products on Amazon because I wanted to help them produce their products efficiently in the US. He said, 95% of his clients don’t even consider manufacturing in the US as an alternative, because they believe it is too expensive. I pointed out that he was right, labor rates in China are about 1/6th the labor rates in the US. But, when looking at the amount produced by Chinese labor vs. US labor, the US produces 8 times as much per person. So on a productivity adjusted basis, Chinese labor is on aggregate 30% more expensive that US labor.
That conversation did not change anyone’s mind. Because there are more problems to solve and that was an aggregate analysis and it comes down to the actual product you want to make.
Did you know that if you want to get a Printed Wire Board manufactured you can go to China or US manufacturers, but here is the difference we found. The Chinese company had you upload your files, gave you an instant quote and you could order it immediately for delivery in 10 days or less. You could go online and monitor the progress and predicted ship date the entire time – sort of like the Dominos Pizza Tracker application. With multiple US companies, it often took over a week to get a response at all and they wanted a meeting, to know our business, to scope out the size of the future relationship…. Too late, we already received the finished boards from China.
US companies need to compete on speed. It is THE biggest advantage we have and we don’t even know it. If the US PWB makers had the same process as the Chinese company they could deliver in 3 days or less. China will never be able to compete with that because even when shipped by air, it takes at least 1 week to get here and clear customs.
COVID-19 is making everyone rethink buying from China for any number of reasons. That good because we have had everything it takes to be a far stronger competitor but we have abdicated our manufacturing on the believe that labor cost is everything. We even send automated manufacturing to China. The machine costs are the same and energy is cheaper here, so explain that.
CREAN has amazing Smart Factory methods and technologies available to help US companies compete with anyone in the world and deliver quality products faster and at costs below Chinese competitors. But it takes working with the right experts to design operations for speed, efficiency, and effectiveness.
COVID-19 it turns out is making US companies bring home manufacturing and that is long overdue.
We should be delivering faster – from inquiry to delivery. And if we use the right Smart Factory processes, our experience is very clear – we can be so much more efficient than Chinese competitors that we can also beat them on price. And the US still is nearly always superior in terms of quality. We have to be hungry and focus on speed. There is no doubt we can bring manufacturing home to the US and do it competitively, so let’s go get ‘er done!
