American manufacturing: Back on track?


The American manufacturing industry hit rock bottom between 2006 and 2009. More and more companies were choosing to manufacture products through offshore plants due the ability to cut costs based on low hourly wages – particularly in China. Global economic crises, civil unrest and international conflict in oil rich locations and a general apathy in young students who showed little interest in science or engineering all added to the decrease in manufacturing within this once great nation. However, even depleted the industry remained relatively strong and since 2012 when green shoots started to emerge – US manufacturing has seen a startling  resurgence.

One of the most beneficial factors has been the re-shoring of many industries. While labor in China is cheap with average manufacturing wages just $1.60 per hour compared to $34 per hour in the US, the developing nation simply cannot compete in terms of value and skill provided by workers. When considered in terms of productivity rankings, US manufacturing workers come out on top of the rest of the world – contributing $73 worth of value-added work every hour where the average Chinese worker contributes only $7.19 value per hour. This has much to do with the incorporation of intelligent automation, continuous improvement, and maximizing human  development.

Lean is all about adding value, and as we have seen – that is what US workers do best. US workers outperform all others in the world, and this is largely based on investment in technology. The investment in human capital and technological advances is reflected in the recent growth in students now studying engineering and computer programming as parts of their business qualifications. Young business executives are increasingly looking for ways to get ahead through the development of on-shore processes – rather than cutting costs at the expense of mediocre processes and  products.

Throughout preceding decades, the continual fluctuations in oil prices and availability have caused many problems for US manufacturers. However, in recent years the US has invested in developing ways to produce and harness natural gas as a fuel. This flourishing on-shore industry is more stable and reliable than oil and relatively inexpensive.

Playing another valuable part in the US manufacturing resurgence are industry suppliers. Advanced technology and higher quality are made possible by high-spec parts. An unheralded yet ubiquitous part used in almost every form of industry and manufacture is the load cell. In basic terms, this is a piece of equipment that converts force into an electrical signal – giving precise measurements and capable of triggering other mechanisms. Load cells have a multitude of applications, from supermarket checkout scales, through forklifts and cranes, to aerospace design. With so many industries relying on these devices, it is good to know that Transducer Techniques, a US company, is a leading supplier. All of Transducer Techniques’ production is onshore – just one example of a patriotic company bringing industry home. It is through not only manufacturers of consumer products being based in the US but also suppliers like this that the US can truly become a powerful and independent manufacturing nation once  again.

With US manufacturing output at its highest level in decades, the future is looking bright. The upward trend looks set to continue – this time with a stable onshore foundation meaning that little has potential to bring it  down.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.