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Posted on : Thursday 2nd July 2020 02:40 PM

How Small to Medium Manufacturers Can Compete in the Global Market

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Reshoring is a hot topic in the United States. Politically charged, the practice promises a rise in jobs for workers, profits for manufacturers and a revival of the ‘Made in the United States’ movement. Small- to medium-sized manufacturers can get ready for a manufacturing resurgence, driven by reshoring and regulatory changes.


Reshoring is the moving of a business operation that was moved overseas, returning to the country it originated in. In this case, United States manufacturers are bringing their services home from other manufacturing economies, such as Asia. But, what’s driving this change?


Impending regulation by the International Maritime Organization (IMO) has mandated a reduction in fuel emissions, in a bid to reduce the green impact of ships. The regulation will probably be in effect January 2020 and is believed to quickly increase demand for higher quality fuels for shipment.


By boosting the cost of transporting goods across seas, the regulation means it is set to become more cost effective for goods generally made in China (that’s 20 percent of the worlds manufacturing output) to be sourced from homegrown or near-shore manufacturing facilities. Sounds great, doesn’t it?


News headlines suggest that manufacturing is coming back home. But, a renaissance of America’s industry was never gonna be that simple, specifically for small and medium sized manufacturers. Back in the 1970s, when the United States manufactured 18 percent of the world’s total goods, the industry looked a lot different to the sector we know today. While automation and robotics were present in some factories, the technology was certainly not commonplace. As a matter of fact, one of the arguments as to why Asia has stormed ahead in the global manufacturing race is as a consequence of the region’s aggressive deployment of automation.


China, for instance, is the world’s largest market for industrial robotics, boasting sales nearly the combined volume of Europe and both North and South America in 2016. The United States is actually not averse to automation, but its use has been limited to large-scale facilities. As the manufacturing renaissance begins, this will need to change.


Small- to medium-sized manufacturers have for sure heard of the smart factory movement. But yet, they would be forgiven for thinking investing is too expensive. Luckily, that is not the case. Investing does not require a complete systems overhaul. Rather, industrial parts suppliers are enabling manufacturers to make small incremental changes to automate production.


Consider this as an example. A manufacturer of peripheral products for automotive production, for instance electrical control and security products, may already use a SCARA robot to assemble circuit boards. But, the facility might not have an appropriate programmable logic controller (PLC) to manage the robot and any associated automation, such as a conveyor, in the most effective manner.


By investing in new technology to complement automation, the manufacturer could reap substantial production rewards. In this instance, the PLC system could enable complete synchronization of the conveyor and SCARA robot, permitting circuit boards to be assembled without pauses in production.


Should the IMO’s fuel emission regulation cause increased costs for offshore imports, improved productivity in U.S. facilities are likely to be important. America cannot create entirely new production facilities to substitute the heavy amounts of manufactured goods we currently import from Asia. Still, manufacturers can prepare to boost their capacity by using automation.


When major organizations are hit with larger invoices by their overseas suppliers, America’s small and medium sized manufacturers need to become the go-to guys. For this to succeed, these businesses should have a chance to access technology that will allow them to manufacture as efficiently and quickly as their overseas predecessors.


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