China Complex Parts Blog

When you think about the manufacturing industry, what comes to mind?

Some people reflect on the days of the past, when the U.S. economy seemed full of countless opportunities. Others remain hopeful in imagining a future that encompasses a revival of such. 

If you agree with the latter, you’ll be surprised to learn that the time for a manufacturing comeback is now… right now. 

There are some exciting possibilities on the horizon for commercial space flight.

Last month NASA awarded funding to Boeing and SpaceX for both companies to continue working on their “space taxis” which could carry astronauts to and from space stations. This month Boeing has reached its final commercial crew design milestone for its CST-100. This means that the company can now begin planning for full-scale flight tests article construction.

Last year we wrote a blog about 3D printing in the aerospace industry, and over the past 12 months it seems we have continued to see buzz within the industry.

Recently companies like GNK Aerospace and others have announced plans to research techniques for additive manufacturing.

At Ardel we are always monitoring industry news and one issue we’ve been watching recently is about conflict mineral statements.

In 2010 the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed to help bring about financial reforms in the wake of the Great Recession. In an effort to help promote financial stability the act also includes provisions to dissuade companies from engaging in trade that supports regional conflicts. These provisions are now causing manufacturers to take a closer look at their supply chain as publicly traded companies must now be in compliance.

There are many rules and regulations governing the manufacturing sector, including the Defense Production Act, which helps to ensure the military is properly prepared.

The Act was passed in 1950 during the Korean War and was a part of a broad civil defense and war mobilization effort during the Cold War. The Act allows the president to issue executive orders for purchases that need to be completed quickly in order to maintain national security. It allows the president to establish regulations, orders, etc to allocate materials, services, and facilities to promote national defense. Finally, it also authorizes the president to control the civilian economy so that scare or critical materials necessary to national defense are available.

There are many factors that contribute to a manufacturing business’s success; quality of product, customer service, proper and current equipment, necessary certifications, and many other things are all factors in the ever-changing algorithm of successful business strategy.

However, a recent article I read got me thinking about a major factor that I’d like to take some time here in our blog to examine: supplier relationships.

Back in April, TIME Magazine picked up on a trend in the manufacturing sphere that’s been gaining ground in the industry with their cover story: Made in the USA.

Some are calling it another industrial revolution, but 21^st Century style - an advanced manufacturing response to the digital age. There are even those that are expecting and advocating a shift back to the U.S. as being primarily a manufacturing nation, with technology and education joining forces with to create a much larger technically skilled advanced manufacturing labor force. Others argue that the “revolution” isn’t sustainable, and that the next labor revolution should see the service and management sectors dominate.

This past October, Patrick McHale, CEO of Graco, Inc. gave an illuminating talk on the status of manufacturing in our home state of Minnesota, and indeed, as things stand – of most states in America.

Speaking at the 2012 Manufacturers’ Summit at the Minneapolis Airport Hilton in Bloomington, MN, Mr. McHale spoke of the “red flag” he saw in outsourcing low-skill manufacturing jobs overseas. While conceding that such a policy wasn’t necessarily a bad thing for America so long as our country took steps to bring advanced manufacturing jobs to its home territory, McHale also noted the perils of off-shoring too many industrial jobs. His reasoning seems reasonable to our own way of thinking here at Ardel: by outsourcing too many low-skill manufacturing jobs to China, Indonesia, and the like, America is giving these countries the incentive to develop advanced manufacturing bases on par with our own. As unskilled labor pools overseas become – by sheer effort and labor – more skilled, the possibility of developing advanced manufacturing jobs to accommodate these new skill-sets is that much more likely.

One need only look at the past several decades to see that while the United States remains one of the world’s biggest manufacturing powerhouses, we’ve fallen behind a fair bit.

Thirty years ago, one by one, manufacturers who dealt in bulk production of things like electronics and toys made the critical decision to reconfigure their operations in places like China’s Pearl River Delta, Singapore, the Philippines, or Mexico. As a result, the total percentage of our workforce that is employed directly or in a field related to manufacturing has declined steadily since the late 70s, to a point where it now constitutes roughly 9% of American workers. Compare this statistic to the boomtown heydays of the early 1950s when around 30% of our workforce was engaged in manufacturing, and you can see the great disparity. Cheaper workers, more permissive labor laws, and certain aspects of free trade agreements have all contributed to a culture and atmosphere where it is deemed “smart” – and justifiably so – for a large company to migrate its manufacturing capacities overseas. Few companies have used the productivity of foreign workforces more brilliantly than California’s Silicon Valley technology companies, where outsourcing of printed circuit boards and silicon chips has gone on since at least the 1980s.

For the large part, we who were born in North America grew up in an instant age.

We had refrigerators, microwaves, toasters, dishwashers, and washing machines that made the daily schlep of food storage, cooking, cleaning, and grooming into something less than a footnote in our collective day. And as our country came online throughout the 90s and the 00s, we found ourselves living in a world where everything – information, consumer products, skills, career opportunities, professional consultation, friendship, even soul mates – were suddenly ours for the Google-searching. In a few brief years, the work of Tim Berners-Lee and his like grew to encompass the entire planet. People once marveled that a supersonic Concorde passenger jet could deliver travelers from Charles De Gaulle Airport to JFK Airport in a matter of a few hours. Today, these same people can connect with friends, loved ones, and business associates across the globe in the matter of just a few, wireless seconds.