By Heidi Schwartz, Internet Director, Group C Media
This past spring, representatives from industry, labor, government, and academia gathered for the 2012 “U.S. Manufacturing Competitiveness Initiative: Dialog on Next Generation Supply Networks and Logistics,” sponsored by Georgia Tech and the Council on Competitiveness. During the event, representatives shared their perspectives on the current state of U.S. manufacturing, the challenges it faces in terms of global competition, and possible solutions to mitigate those obstacles, specifically in terms of supply networks and advanced logistics.
A joint Georgia Tech-Council on Competitiveness Report has been published that details the forum’s findings and contributes to the Council’s National Manufacturing Strategy. According to the report, manufacturing in the U.S. is growing stronger; however, maintaining and strengthening America’s competitiveness in the global market will require a tremendous measure of planning, effort, and focused financial investment.
According to the report,
Manufacturing is supporting the present—albeit tenuous—economic recovery, which has been growing for 30 consecutive months. In January 2012, according to the Institute for Supply Management, nine of 18 manufacturing industries reported growth, while seven industries reported contraction.
As the economy gains momentum, some estimates suggest that by 2020, growth in manufacturing will have increased freight volumes by 19% and increased truck tonnage by 28%.
While U.S. manufacturing has unquestionably suffered in certain industries, such as textiles, wood products, paper products, and plastics and rubber products, America remains a world-leading producer and exporter of high-ticket products in industries such as aerospace, chemicals, machinery, and medical equipment.
Furthermore, the outsourcing of manufacturing that has generated headlines since the 1980s has started to show signs of a reversal. Many companies are finding that poor quality control and productivity losses at their offshore manufacturing sites outweigh the advantages gained through lower labor costs. Production facilities located closer to their markets also benefit from shorter, faster, and more reliable supply chains.
The face of manufacturing itself has undergone a dramatic transformation over the past 20 years. Advanced manufacturing techniques support streamlined, efficient processes and supply chains that embrace computer-integrated systems, flexible automation, sustainability, manufacturing systems design, analysis and simulation, lean manufacturing strategies, and performance measurements.
Another plus for the manufacturing sector is that businesses contain the basic ingredient for a dramatic surge: money. Companies are now holding more cash as a percentage of assets than at any point since 1963—approximately $2 trillion. Manufacturers will increasingly require highly sophisticated, process-oriented logistics expertise to model, manage, and mitigate supply chain risks and costs, and to respond to rapidly evolving sourcing and distribution patterns. This idle cash will begin to find its way into near-term budgets to make operations more productive and internationally competitive.
The level of optimism regarding U.S. manufacturing’s present and future world competitiveness varies among industry leaders, but there is universal agreement on the importance of manufacturing to the U.S. economy, and that the value of developing robust supply chains and logistics cannot be overstated. In other words, if goods don’t move, you don’t have an economy.
To download the complete report, click this link.