Report: US to regain lost manufacturing
Here's some good news for U.S. manufacturers — a new report from Boston Consulting Group titled “Made in America, Again: Why Manufacturing will Return to the U.S.”
According to the report, which was released Aug. 25, the return of manufacturing to the U.S. will accelerate as companies take into account the full costs of outsourcing to China and strategic advantages of making products closer to consumers in North America.
The report cites factors including 15-20 percent annual increases in Chinese wages and a strengthening yuan, which will nearly erase China's manufacturing cost advantage vs. low-cost U.S. states for goods imported into North America.
Even as Chinese factories become more productive, thanks to automation and improved technology, rising factory wages will make it tough to compete with higher U.S. labor productivity.
“Greater automation would undercut the primary advantage of outsourcing to China, which is access to cheap labor,” said Harold Sirkin, a BCG senior partner and lead author of the study. “Once companies carefully look at all the costs, many will find they'll be better off making their products closer to customers in the U.S.”
The report cites examples like this one: Coleman Co. is moving production of its 16-quart wheeled plastic coolers from China to Wichita, Kan., due to rising Chinese manufacturing and shipping costs.
Won't other low-wage nations like Vietnam and Mexico pick up the work? Yes, says the report, but they will not be able to absorb all the higher-end manufacturing because they lack adequate infrastructure, skilled workers, scale and domestic-supply networks.
China will remain a major manufacturing power. But it won't be the force it is today, the report says. In terms of supplying North America, China will no longer be the default option for many OEMs.
Apple's Steve Jobs had impact on plastics
Steve Jobs' decision to resign as Apple Inc. CEO last month was a huge business story. Apple may not be the No. 1 player in personal computers, but its impact in that market — and smartphones, tablet computers and portable media players — has been significant.
Apple also put an emphasis on design that has been revolutionary. The first colorful iMac of 1998 broke from “the dull world of beige and grey plastic computer cases,” Jonathan Glancey of The Guardian newspaper wrote recently. “With its oddball marriage of boiled sweet colors and transparent plastics, the iMac was certainly eye-catching, and it also sold — 2 million in the first 12 months.”
Jobs followed up with the iPod MP3 player, iPhone and iPad, always making bold design statements, often with plastics.
Long before the word “sustainability” become a buzzword, Apple's plastics material choices have been under a microscope and, indeed, it has paid attention and adjusted its material portfolio.
Now that Jobs is retiring, will we see changes that will impact Apple's plastics part and material suppliers? Or will the company be cautious about straying too far from Jobs' strategies?