Manufacturing: A strategic investment, again
For decades, labor-intensive manufacturing lost a large percentage of the working population to off-shoring. Cities such as Lewiston witnessed the disappearance of industries like shoemaking and paper products - job losses that were only partially offset by growth in the service sector.
However, the productivity boost that modern automation provides has made today's manufacturers cost-competitive with companies in the Far East. Manufacturing is once again a strategic investment. And the benefits flow through the economy as a whole. Economic studies have proven time and again manufacturing's strong impact on the Gross Domestic Product (GDP).
Modula vertical lift modules in action. More efficient storage and a clean, safe working environment.
Source(s):U.S. Bureau of Economic Analysis, Annual Input-Output Tables
Any cost advantages of offshore production are disappearing fast. Take China, for example. According to logistics firm Cerasis, rising wages and the growing value of the yuan has led to a 187 percent increase in manufacturing costs in China. In comparison, manufacturing costs have increased by a mere 27 percent in the United States. In the rest of Asia, wages increased by an average of 7.1 to 7.8 percent between 2000 and 2008.
Total cost of production for US-bound goods in many Asian markets now match or exceed American ones; the market crisis actually produced a drop in average wages for factory employees by 2.2 percent since 2005. The advantages of U.S. manufacturing are even greater if you consider automation. Highly automated technology is like manufacturing on steroids: productivity and quality increase simultaneously as operators use technology to control production from raw material to finished product.
Automation: Nothing to fear
Banking, logistics, surgery and medical recordkeeping are just some of the fields that have seen automation take over select tasks. According to a new study by the Boston Consulting Group, machines - which now account for 10 percent of all manufacturing tasks - are likely to perform about 25 percent by 2025.When considering the alternative (off-shoring) one should bear in mind that prior to 2008, a welder in the U.S. could make $25 an hour and in China only $2. Today, with the addition of robots that run between $3 and $8 an hour, the gain in productivity far outweighs the labor differential and the cost of a supply chain stretched halfway across the globe. The robot is faster and more accurate, and local manufacturing means less freight and less lead time to serve customers, resulting in a substantial competitive advantage. And in many trades, the automation solution fills the need in areas where there's already a shortage of skilled workers.
Amazon recently installed 15,000 warehouse robots to pull items off the shelf and bring them closer to operators. Previously, pickers had to walk 11 miles per day before the robots came along. In this reduction of time spent walking, Amazon's operators gained in ergonomics and working conditions, which translated in better productivity, accuracy and less turnover.
Modula's vertical storage products are automated solutions themselves; a system of controlled motion that stores trays vertically, up to four inches off the ceiling, and can hold payloads ranging from 500 to 2,200lb. The Vertical Lift Module is in essence a smart lift that puts away and retrieves parts without the wasted space and time of static rack storage. Since Modula produces 1,000 VLMs per year, the firm has to produce more than 100,000 trays - something that would not be competitive if done manually.
Modula uses advanced technology such as this Salvagnini laser cutting cell
Just as Modula benefits from automated systems, its customers in turn cut costs and improve productivity with the Vertical Lift Modules built by the Lewiston technologies. It's a win-win scenario for all parties, with the end users reaping the benefits of automated storage and the Lewiston economy gaining jobs as a result.
Modula has sponsored this post. They have no editorial input to this post - all opinions are mine. Jim Anderton