Manufacturing renaissance?

So I've been thinking about geo-politics of late and I'm wondering if we can have a useful discussion of where US/North American trends may be leading on the reversal of Globalization and a return of Manufacturing.  It seems like we've got some industries that are well overdue for a reinvestment of capital and hardware combined with new capabilities of processes like 3D printing ready for broad scale applications.

On the one hand, I can see some industries who could genuinely consider sourcing from something as small as garage-startups (or possibly being used as subcontractors...?).

My question was whether a revolution/revitalization in manufacturing could lead to significant increase in capabilities/reduction in costs for aftermarket support in the industry.  

Any thoughts?

That's a good question

The pandemic has shown, at least, that lowest cost, just-in-time, single source supply chains have a high amount of risk in them. It will depend on the rest of us to show that we are willing to value (pay) for redundancy, including potential re-shoring.

My place of work is likely a bit different from most as we deal with so many govt contracts that we have to be able to 100% source American materials and manufacturers (gets tricky with sheet stock and other forms of stock) but 90-95% of what we ship out is domestic just as a result of our existing policies.

I think we will see a renaissance on this.  Maybe not a full return to industry of the pre-70s, but a definite growth.

I think it's equally likely that we see large corporations continue to manufacture in cheaper locations but focus on taking more control over their global suppliers and raw material pipelines so they may control more of the overall process.

In reply to stroker :

Since Robots cost about the same all over the globe.  And shipping isn't getting cheaper.   
     Maybe it's time America makes those investments.  We still aren't going to get back high paying assembly line jobs. Not when Robots work 24/7/365  without a Union. And cost less than $5 / hr including purchase, maintenance, and energy consumption.  
       Some empty offices can be converted into factories while others will be converted into housing ( including low cost).  
     Work from home is replacing office work. And gaining efficiencies of it's own.  While a lot of middle and even upper  management jobs will be replaced with AI.  
 The loss of over a Million cab drivers  and a large number of truckers to AI  the pending labor shortage will be alleviated 

    Programmers will be in demand ( working from home) . Paid piecemeal subject to acceptance.  
   I'm glad I'm about to step out of the labor pool. 
    

STM317 said:

I think it's equally likely that we see large corporations continue to manufacture in cheaper locations but focus on taking more control over their global suppliers and raw material pipelines so they may control more of the overall process.

Not with Shipping.  An ocean voyage is expensive.  The ships are expensive the fuel and yes the crew all are expensive.  
   Then you have the dock situation.  Even if due to warming. the  Arctic  passage opens up. Stuff made where labor is cheap still has a month or more of transit time  before reaching markets. 
  That time has a inventory cost of its own aside from shipping costs.  In addition some markets are extremely transitory.   A modern version of say the PetRock. may burst on the market and in a few weeks reach saturation point.   So between tooling delays, shipping delays , never reach the market while the demand is there. 

I work in the 3d printing industry and what I can say is that there are a lot of people talking about additive manufacturing "at scale" but its all hype. The systems and software are still so heavily focused on prototyping. There are opportunities out there and there is progress being made but metal printing is downright expensive and metals/polymers both need some form of processing. As education develops and people start designing for the process (like you would with a molded /stamped /casted/forged part) and really using the benefits you can optimize the cost and performance but right now a lot of that is very manual - AI comes into play here and powerful computers who can take the leg work out but this software is still as sophisticated as an anvil. 

I laugh at "experts" preaching industry 4.0 and digital inventory when they have no idea what a PPAP is or how it relates to a production industry. A lot of times it is good buzz words to sell printers. The printing hardware/software/firmware changes often so stability between machines of the same make/model isn't there like an injection mold press. You have a lot more dials to turn if you want to nail down a process and the machine to machine variance is still too much to really do distributed manufacturing. Don't even get me started on enterprise systems and how this fits within the way an organization does business - thats its own mess. 

There is a lot of value but finding it and maturing it is the difficult area, lots of opportunity but its going to take time to get there. 

safety is another big thing, you could turn offices over but you need to renovate the site with the right equipment depending on what modaility you are printing. 

Solve multiple geopolitical problems and move manufacturing to Central America. Doesn't have to be all, just diversify like was alluded to prior. 
 

South America is also a good option, as well would be Caribbean islands. 

So as someone working in supply chain management for the last 30 years I'll chime in.

I think the pandemic demonstrated what a large number of us have been saying for the past 25 years; that going off shore isn't near as cost effective as people think it is.

frenchyd said:

STM317 said:

I think it's equally likely that we see large corporations continue to manufacture in cheaper locations but focus on taking more control over their global suppliers and raw material pipelines so they may control more of the overall process.

Not with Shipping.  An ocean voyage is expensive.  The ships are expensive the fuel and yes the crew all are expensive.  
   Then you have the dock situation.  Even if due to warming. the  Arctic  passage opens up. Stuff made where labor is cheap still has a month or more of transit time  before reaching markets. 
  That time has a inventory cost of its own aside from shipping costs.  In addition some markets are extremely transitory.   A modern version of say the PetRock. may burst on the market and in a few weeks reach saturation point.   So between tooling delays, shipping delays , never reach the market while the demand is there. 

Shipping is cheap when done in bulk.

It is so cheap that hogs are slaughtered in the US, shipped to China, butchered there, and shipped back.

It costs about 20 gallons of fuel to ship a car across the Pacific.

In reply to frenchyd :

Working from home doesn't replace offices. It extends them, and gives them more flexibility. 
 

Home offices are useless without the core commercial office base.  Where do the servers reside?  The IT departments?  The secure accounting systems?  The proprietary business information and processes?  The manufacturing lines?  The shipping departments?

Having a computer sitting on your desk at home does not mean there is not a commercial business supporting it in the background. 
 

I am completely comfortable saying there will be a very long and lucrative future for all forms of commercial construction and development. We build different things now, but we still build. 

SV reX said:

In reply to frenchyd :

Working from home doesn't replace offices. It extends them, and gives them more flexibility.

I'd say it can definitely downsize offices, sometimes drastically. The company I'm currently working for has way more people working from home than desks at the office for them, and those desks are sitting idle. We've sold off one building (the big one) and are using 2 others (one for each "coast," both small) as a vestigial server room/glorified storage closet (east coast) and glitzy meeting space (west coast).

SV reX said:

In reply to frenchyd :

Home offices are useless without the core commercial office base.  Where do the servers reside?  The IT departments?  The secure accounting systems?  The proprietary business information and processes?  The manufacturing lines?  The shipping departments?

In my example: Mostly cloud with a few in the east office and some colo, WFH with a little stuff left in the EC office again, cloud, cloud, there isn't one, east office (for the last bits of grandfathered-in physical server work). The number of people in the east office is usually somewhere between 0 and 1, west office between 0 and 10 depending on if there's a bigwig meeting happening.

(Cloud means "someone else's server that we don't get physical access to, usually packed into a data centre")

I don't think manufacturing as we know it is "coming back". It is morphing. 
 

It is becoming more relevant to the times as we adopt new methods and techniques.

Business will not discard something that works, but it will also not hang onto something that does not. 
 

We will continue to add layers of nuance to our manufacturing processes. Some will get bigger, some smaller. Some components of a business are best served with overseas manufacturing, and some can be well served through desktop processes at home.

Consider printing.  There was a time when all signage was sent out to a local print shop.  Now much of that can be done on advanced printers most businesses own.  But they also have the option of ordering through online services.  Or perhaps they need a local print shop for large format or specialty products.  A smart business will recognize multiple different approaches that are all useful in varying ways to their company.

And any company that fails to recognize multiple approaches (with some methods being better for certain things than others) will fail.
 

In reply to GameboyRMH :

It downsizes SOME offices. But it does not reduce commercial space. 
 

There is no shortage of commercial construction right now.

You are describing is smart allocation of physical space resources. Not less commercial space. 
 

I agree. 

In reply to GameboyRMH :

Your company sold off one building.   That's smart.  Good reallocation of resources  

But the building still had value, and another business purchased it to meet their needs.  
 

That doesn't make the building obsolete to business. It means your company has different needs than they used to.

In reply to SV reX :

You are absolutely  correct.   Part of why American jobs went overseas is investment costs. Only highly subsidized countries like China were willing to make the investment in new buildings and equipment  to be competitive and ultimately profitable.   
  Large,  local  sawmills no longer saw wood for furniture  production. Instead those logs are put into containers and shipped to China.   Who have factories laid out for automation and high value furniture production.  Logs come in a shipping container and furniture goes out in those same shipping containers  with very little human contact in between.  
    

SV reX said:

In reply to GameboyRMH :

Your company sold off one building.   That's smart.  Good reallocation of resources  

But the building still had value, and another business purchased it to meet their needs.  
 

That doesn't make the building obsolete to business. It means your company has different needs than they used to.

True, now you have to consider what fraction of other business would find themselves in the same situation - I'd expect it's a majority of "knowledge work" and it's not going to be a lose-some-here-gain-some-there situation, but a major trend that's going to impact property use on a whole. Other companies with more residual Taylorism (which this company appeared to have no shortage of in the pre-pandemic times, although likely more for security reasons) may hang onto their commercial space that they're not sure they'll use again for longer before they decide to sell it off, it's too early to assume that the situation is settled. So there may be a lot of commercial construction because companies aren't yet ready to sell the offices they've hardly used for a couple years, and perhaps haven't felt any competitive disadvantage that comes with holding onto them unnecessarily.

I haven't followed up on what happened to the big building, but I wouldn't be surprised one bit if it's set to be demolished to make room for something completely different like an apartment tower rather than being used as commercial space again.

Update: Checked on the building, as of August 2021 it's still being used as commercial space, lots of For Lease signs up and a mostly empty parking lot though.

SV reX said:

In reply to GameboyRMH :

It downsizes SOME offices. But it does not reduce commercial space. 
 

There is no shortage of commercial construction right now.

You are describing is smart allocation of physical space resources. Not less commercial space. 
 

I agree. 

Part of the reason banks are holding onto unused downtown office building isn't for the servers. And the handful of techs needed to service them.  ( the cloud)  Is because there is almost no market value and hanging on is cheaper then the write downs needed to dispose of them.

    Look at Elon Musk. His semi serious suggestion to have the homeless occupy the near vacant Twitter building.   
Then he looked in his own backyard and realized his buildings were nearly empty. 
      Insisting his workers go into the office is a losing strategy.   The same computer used for work keeps track of each workers productivity much more efficiently than layers of middle management do. 
     The bank my wife works for has a 34% increase in productivity at a 22% lower cost. 
   Those sorts of gains give the bank time to capitalize  on those real estate investments. 
     Construction companies  will profit from those conversion costs.  Far more  than they will from building erection.  At least in the near future. 

In reply to frenchyd :

I think its funny that it took a pandemic for us to realize I don't need to drive an hr to work each way just to use a computer on the internet with my co-workers. Yes thats oversimplified but the reality is a flexible workforce is way better. I choose to go in the office some days and I balance other days at home or on the road.

Banks biggest fear is theft.  Not from buglers (ATM's )but from the internet.  In fact  security is the highest paying wages at banks.  ( and where my wife is). That can and is best served at home.   
       The changes that happen in security are so complex and change so quickly as new threats surface that just keeping track of it is mind boggling. 
  Distractions like office politics, who's wearing what clothes, water cooler discussions,  office romance or sexual harassment, is band width banks can no longer afford.  
       Task assignment and verification is easily tracked.    Remarkably. Banks are eliminating computers.  Instead, relying on the security of the cloud.  Her new system has a keyboard and monitor. Period.  

fidelity101 said:

In reply to frenchyd :

I think its funny that it took a pandemic for us to realize I don't need to drive an hr to work each way just to use a computer on the internet with my co-workers. Yes thats oversimplified but the reality is a flexible workforce is way better. I choose to go in the office some days and I balance other days at home or on the road.

My wife has limitations where going into the office would have forced her retirement almost a decade ago.   In fact her last office job led to her accepting work from home.   
    She works in her pajama's and messy hair  until her scheduled break when she showers deals with hair and clothes and is back working at the end of her break.  
   She actually logs in more work in 8 hours than 8 hours. Meetings where she documents everything she's still capable of dealing with other matters. Resolves questions, deals with E Mail etc. while keeping a global task force productive and efficient.  
 Many of her programmers are in India, Europe, the East and west coast.  New hires are coming on board from Mexico and South America. 
     Her office is bigger than most homes living room with  a nice view of the lake.  Totally personalized.   In fact her working from home is listed as her business address on the company register.  

Any chance we can get this thread back on potential enhancements and availability of manufacturing?

I don't expect much anything to change with manufacturing, 3D printing is still an overhyped niche technology and CNC mills are still cheaper to run in China. Companies will still want to build fragile JIT supply chains for maximum profitability so re-shoring will be minimal, I expect the Ukraine invasion and the resulting fuel price hikes will actually have a bigger effect than the pandemic on that.

The machine shop where I work part time has had an enormous surge in orders beginning almost two years ago. none of these are documented re-shoring, but many of the really new (not re-orders) might have been off shored previously. Another 5 axis CNC mill is coming on line this month, making 5 units running, and a  horizontal is being shopped for. It won't happen overnight, and probably not totally as before 1980, but the tide has turned.