August 1st headline from Reuters – “US manufacturing growth accelerates… “. Manufacturing has had some ups and downs over the last 3 years, but overall this sector has been experiencing good if not strong growth. US manufacturing has changed over the years, much of high, labor intensive volume manufacturing has been exported to Asia.
Some of the manufacturing growth comes from increases in the automotive, energy, heavy industry and housing sector, but we still see some manufacturing being brought back from China. In previous blogs we discussed some of the reasons than included increases in logistics cost as well as a closing of the wage gap between US and China labor. Another reason is related to quick response manufacturing. Lean manufacturing and quick response manufacturing require lower volume runs and faster change-over. US manufacturing is becoming more adept at quick response manufacturing and this is creating some supply chain advantages that are not available with off-shore manufacturing. While China manufacturing has been able to adapt lean manufacturing practices, frequent design changes are something that is still a struggle as communication issues can hamper rapid changes in manufacturing. Also it can be difficult to have quick response when there is over 6000 miles in transport. Getting the latest model change into the US market within 24 hours is becoming more important.
The computer electronic industry is currently one of the most dynamic industries around as mobile devices including tablets are overtaking desktops in sales. Even within these industry segments, features and configurations and market needs are changing on a daily basis. As mobile devices come out with more features, designers are modifying desktops to add similar features. Technology giants Apple, Google and IBM have all recently announced bringing back some computer assembly to maximum flexibility to adapt to changes in the market place. One trend that is emerging is personalizing the device where the consumer orders a device at the retail outlet, customized to their wants, the next day the product is manufactured at the local manufacturing plant and delivered to the retail outlet or the consumers address 24 hours later. This type of response would not be possible with final assembly done over seas.
Quick response manufacturing has been a key strategy for Packnet over the last 18 months. Fast response and outstanding customer service have always been a strong point of Packnet. Formally implanting Quick Response Manufacturing techniques is taking this advantage to the next level.