The Future Of Manufacturing in North America

The little red wagon--the Radio Flyer--is no longer made in America. There's been much media commentary about the departure of this manufacturing activity (for China), and I believe that John Kerry has even chimed in on the matter.

But here's a product that is made in America: CT (CAT) scanners for health care. They sell for around $1 million each. General Electric builds them, in places like Waukesha, WI.

Why is GE building medical machines in the USA?

1. Product engineers regularly work on-site with assembly workers. And GE is quick to credit production workers with important productivity improvements.

2. The ability to get new, improved products to market more quickly is enhanced by having all the players in geographical proximity

3. And by having skilled, highly-motivated people in all functions.

Even so, if CT scanners could be made small enough to fit in a FedEx package, the geography of production might have been different.

Why are components sourced overseas?

Mechanical components come from GE's plant in Mexico, generators from its factor in India and displays from its site in Beijing." What would happen if legislation required all of these parts to be made domestically? The costs of the finished systems would go up and the GE products would be less competitive, encouraging hospitals to opt for systems built by non-US suppliers, such as Siemens.

International trade issues are complex. Sloganeering and demonization are not very helpful. Unfortunately, that is the level at which most political discussion of these matters is presently being conducted.

What kind of products will be produced in the USA in the future?

1. Products that are physically large enough for transportation costs to be significant.
2. Products which require:
a. frequent changes to compete in a fast-moving market
b. alert, motivated workers, participating in the improvement of the production process
c. management not threatened by worker participation.
d. engineers on the shop floor and customers heavily involved in the product planning process.

From a well-written posting at the Photon Courier.

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