By: Clare Goldsberry, Plastics Today Total cost of ownership (TCO) and total cost of management (TCM) represent a supply chain model that has been around for several decades. However, according to John Biagioni, VP of supply chain and operations for Dynisco, the concepts are an underdeveloped management science. TCO and TCM can drive product development changes, while Design for Manufacture and Assembly (DFMA) represents one of the complementary tools that can help companies reduce their total costs to manufacture and determine whether to off-shore manufacturing, reshore manufacturing or keep it here from the start. Labor has been one of the biggest perceived cost drivers in pushing OEMs to outsource to Asia. Yet rising labor rates are becoming a big issue in China as there are fewer agricultural workers migrating from the farms to the large cities, which is driving up factory wages. DFMA can eliminate labor from the equation – or at least make it less of a consideration – if companies would implement DFMA as a part of their TCM and TCO. More and more contract designers mold manufacturers are being asked by their OEM customers to design for product simplification in order to reduce the number of components and the assembly complexity that wind up downstream in their supply chain. Part consolidation is a best-in-class principle, yet many companies shy away from using software to quantify the activity. Reducing, avoiding costs Dynicso is a client of Boothroyd Dewhurst Inc.,  a software developer specializing in DFMA.  By using the DFMA software tools, Dynisco has been able to reduce – and even avoid – costs. “When principles of DFMA are simple – you can apply it as a thought process – but you have to crunch the numbers and be ruthless about using DFMA software if you want the big results,” Biagioni told PlasticsToday. “That’s why people need to do the math, not just the methodology. And that math has to be done on both the product structure and the supply chain.” Biagioni noted that the larger argument for reshoring is design optimization: “What features have ramifications on cost? Take measures to reduce or eliminate those.” Design engineering impacts the efficiency of everything that...

By: Andrea Kay, Gannett, USA Today Who would have thought that jobs like metal-refining furnace operators and tenders would be making a comeback in the year 2012? But they are. Such jobs, done by folks who “operate or tend furnaces … to melt and refine metal before casting or to produce specified types of steel,” as defined by the Bureau of Labor Statistics, have increased 16% from 2010 to 2012 after declining 16% from 2007 to 2009. That’s according to a study conducted by Career Builder and Economic Modeling Specialists International that tracked U.S. labor trends and includes data from more than 90 national and state sources. And that’s not all. Other jobs in manufacturing now seeing a revival that had major job losses in the recession include metal pourers and casters. These people “operate hand-controlled mechanisms to pour and regulate the flow of molten metal into molds to produce castings or ingots,” according to BLS. Also rallying are jobs for computer-controlled machine-tool operators for metal and plastic production and engine and machine assemblers. The resurgence is highest among computer-controlled machine tool operators, which has even more workers now than in 2007. One thing is clear: These jobs are related to the types of industries tied to energy, production, technology and transportation. You can find these jobs at such employers as iron and steel mills and steel product manufacturing and machine shops. They are at manufacturers who make machinery for mining, agriculture, engine and turbines, and plastic and rubber as well as manufacturers that make equipment for companies that make cars, motor vehicle bodies and parts, railroad stock and aerospace. Yes, the country is “predominantly a service economy,” writes Professor Farok J. Contractor of Rutgers Business School in YaleGlobal Online Magazine. “But the nation is still the world’s biggest manufacturer,” he says, with “unrivaled productivity in terms of manufacturing value-added per employee or per hour worked.” Among the factors cited for the resurgence is that “jobs once offshored are now returning in industries including automobiles and even unlikely areas like furniture and televisions.” One of several factors that could inhibit the resurgence is U.S. companies’ lack of an apprenticeship system, he says. The study...

By: Tim Hutzel, Dave Lippert and MainStream Management, LLC, Manufacturing.Net, Industry Week The story of how the United States lost its place in manufacturing dominance and why jobs were shipped offshore is highly relevant for business executives, government leaders and anyone interested in understanding their true impact on the country and what it will take to reestablish America’s prominence as a manufacturing leader. Fall of U.S. Manufacturing Dominance There are some Americans, mostly young, who do not know that the U.S. was once the manufacturing capital of the world, and “Made in America” was the most prevalent label on almost every product Americans bought. But the days of U.S. manufacturing dominance are gone. Most consumer goods purchased in the U.S. are now labeled “Made in China,” “Made in Vietnam” or “Made in Indonesia.” How you feel about this depends on your situation and point of view. As a consumer, you probably welcome the low prices of products found in Wal-Mart and other big box stores. As a U.S. business leader, you surely welcome the prospect of lower production costs. The Chinese government welcomes the business growth that is helping to achieve a major strategic goal — to become the next manufacturing capital of the world. And if you are a U.S. worker, displaced by the jobs exodus to foreign off-shored countries, you undoubtedly are struggling to make ends meet. Regardless of perspective, everyone feels the impact of offshoring. Historical Perspectives: Outsourcing and Offshoring Outsourcing — A Common Practice It has long been a common practice for companies that do not have specific manufacturing expertise or capability to have other firms make some components, or the entire product, for them — a process called outsourcing. Unless a company is completely vertically integrated (i.e., controls every part of the manufacturing process from mining the ore to wrapping the final part), it has probably outsourced some operations. The original Ford Motor Company is a good example of a vertically integrated company that literally made the steel and then fashioned it into Model T automobiles. But the current Fords have many outsourced parts, which are assembled into the final product. Most modern manufacturers have an area of expertise...

By: Arik Hesseldahl, All Things D Toward the end of last night’s presidential debate between President Barack Obama and Gov. Mitt Romney, the moderator, CNN’s Candy Crowley, asked a perfectly legitimate question, one that Obama himself is once reported to have asked a group of tech executives that included the late Apple CEO Steve Jobs. Essentially it was this: Why can’t iPhones and iPads be manufactured in the U.S.? Here’s her question: Crowley: Mr. President, we have a really short time for a quick discussion here. IPad, the Macs, the iPhones, they are all manufactured in China, and one of the major reasons is labor is so much cheaper [there]. How do you convince a great American company to bring that manufacturing back here? The correct answer is that, under current conditions, which are highly unlikely to change no matter who is president, the job of assembling iPhones and iPads and other consumer electronics is now done mostly in China by companies that specialize in manufacturing, and will never come back to the U.S. And that’s okay. Sadly, both Obama and Romney flubbed their answers, and educated voters not at all. Romney made his response about how China is a currency manipulator and steals American intellectual property. Obama got started down the right path, correctly admitting that certain low-skilled jobs aren’t coming back, and mentioned “high-wage, high-skilled jobs.” But he failed to close the deal on his point. He then got off track talking about investing in research and training engineers. In part because the time was so short, neither delivered a clear correct answer about an issue that is widely and fundamentally misunderstood by most voters. Here’s what one of them — either one, I don’t care which, and assuming no time limit — should have said in response: “Candy, I understand how some people might get frustrated when they see Chinese workers assembling iPhones. It’s easy to think that those jobs rightly belong in America. The reality is a little more complex, but when you understand it, there’s a surprising amount of good news for American workers. “The fact is, assembling iPhones and iPads is the final step of a complex process,...

By: Aerospace Manufacturing and Design TD Economics, an affiliate of TD Bank, released a special report crediting the revival of the U.S. manufacturing sector as a key driver in the economic recovery, largely due to a slowdown in offshoring activity. This slowdown has kept in the U.S. some of the jobs that used to be rapidly offshored, especially ones in relatively capital-intensive industries such as computers & electronics, machinery, fabricated metals, and plastics and rubber, accounting for about one-quarter of the 200,000 manufacturing jobs added over the last 12 months. The report indicates that since the trough occurring in January of 2010, the manufacturing sector has added nearly 500,000 jobs, in part due to the deceleration of shipping jobs overseas. The drivers behind the deceleration result from a unique combination of dynamic global and domestic conditions. On the global scale, offshore wages have risen rapidly, while an appreciating renminbi and volatile transportation rates have weakened offshoring’s cost advantages. Domestically, existing intellectual property protection, flexibility arising from tighter supply chains, a trend toward mass-customization and access to natural gas energy from shale formations have begun to tip the manufacturing scales back in the favor of the U.S. “Even though manufacturing has shed jobs in the past two months, it does not detract from the remarkable upswing that has been underway since the Great Recession ended. This resurgence has bucked a trend that has been in place for more than a decade allowing manufacturing jobs to be a key driver of the economic recovery,” says Michael Dolega, the TD Economist who authored the study. “We believe that capital-intensive manufacturing industries will lead this onshoring trend, while labor-intensive industries such as apparel and textiles will remain, or perhaps be pushed even further, offshore.” The report cautions that ‘en masse’ industry onshoring is not likely to occur, nor will the trend replace the nearly six million jobs lost to offshoring since the peak in the mid-2000s. Also of note is that new manufacturing jobs will require less labor-intensive, but more high-skill, highly-productive positions that the U.S. has a competitive advantage in. Click here to view the full...