Viewpoints: On-Shoring Boosts Manufacturing Rebound
By Don Lane
President & CEO, Makino Inc.
Web site: www.makino.com
According to the headlines and recent stock market performance, overall economic conditions remain unsteady.
However, the machine tool industry is experiencing a recovery from the recession that has been quicker, stronger and more robust than any other in history. North American sales are climbing to their highest levels in nearly 15 years, with no sign of slowing down. Based on recent reports from the Manufacturers Alliance for Productivity and Innovation (MAPI), overall manufacturing production for 2012 is anticipated to outpace the overall economy with approximately 3% growth. For high-tech manufacturing production, these projections are even higher: The sector is expected to grow by almost 6%.
The reason the manufacturing sector is rebounding at a faster rate is due to the investment by many businesses in factories and facilities in North America. This resurgence is in stark contrast to what’s happened over the last decade, as companies invested in production overseas. As a result of the weakened dollar, combined with overseas quality issues and rising labor costs, companies now have an incentive to on-shore production operations. MAPI currently projects gains in both exports and imports, with inflation-adjusted exports expected to improve by nearly 5%. Forecasts of industrial expenditures are anticipating a 10% increase.
According to MAPI Chief Economist Daniel J. Mecksworth, PhD, this growth is going to be led by several high-volume markets, including energy, transportation (aerospace and automotive) and industrial equipment.
Aerospace is experiencing a structural boom in civil aircraft that should last through the decade. Based on a recent year-end review and forecast from Boeing, there was a substantial increase in new orders during 2011. Much of this growth was attributed to upgrading an aging jet fleet with newer, more fuel-efficient models designed with higher amounts of titanium, composites and other lightweight materials.
We believe that North American manufacturers are going to continue to secure returns on their investments with improvements to their internal efficiency, productivity and capacity. One solution is automation, including material handling systems, robotic cells and in-machine automated technologies, which can alleviate the manufacturing industry’s growing demand for skilled labor. According to a recent national survey conducted by Deloitte and The Manufacturing Institute, there are as many as 600,000 positions available that US manufacturers are struggling to fill. Automated technologies will not only help businesses address those positions but also focus their current skilled labor on more value-added activities.
As onboard computing capabilities continue to evolve, new opportunities will also arise to make machines more operator-friendly with closer monitoring of operating conditions. As a result, interactions with the machines will not only be easier but also more reliable and safe.
Lastly, using contracted application engineering services will permit companies to quote and produce new work, by employing external engineering resources on a project basis without hiring additional full-time employees. At Makino, we take a consultative approach to the improvement of manufacturing efficiencies and practices. Our responsibility is to enable businesses to improve their operations not only through advanced machine and automation technologies, but also through engineering and automation support services.
With clear signs of improved profitability in sight, this is an ideal opportunity for North American manufacturers to invest in their company for a more secure and competitive stance in the global economy.
This article was first published in the February 2012 edition of Manufacturing Engineering magazine. Click here for PDF.