The Disruptive Bang Theory

The American manufacturing industry is expected to resurge, as a result of new technologies and approaches. The resurgence is gladly welcomed and comes at a much-needed time. Manufacturing employment in America has fallen by a third in the last decade, with more than 40,000 factories shutting down. [i] This is fairly correlated with the shift away from Americans making things to American companies—big firms and start-ups alike—outsourcing much of their “making” overseas. And while this trend has been progressively popular over the years, it is anticipated that Americans will make things again, but in a different way. “Making” will not only take place in factories, it will also be done in homes, and not for the reasons you may think—artisanal or faddish. “Making” in the home will become adopted because of its ease, positive environmental externalities, and fun.  What was once only capable for big firms with hulking factories to complete now can be done in a home-basement or by emailing a design to a machine. Congruently, it is also anticipated that companies (mid and smaller sized) will also adopt these new technologies and approaches.

Highly adaptive, low-cost robotics is making manufacturing operations less sensitive to the cost of human labor.[ii] As more automation capabilities are introduced within this sector the common practice of offshoring solely to access cheap labor will become unappealing. Increasingly, the scalability of additive manufacturing, will allow companies to “design distributed manufacturing operations that scale with the market they serve.”[iii] Companies now can make things at the point of use and need. A particularly advantageous approach for smaller companies, because now they can remain competitive—reducing their capital investment costs.  In energy intensive industries (cement and chemicals) the proliferation of hydraulic fracturing has brought cheap domestic energy—lowering costs.[iv]  On the horizon the use of new biological methods of manufacturing materials or compounds have the potential to lower the amount of energy use required in certain sectors. All of which will result in years of company savings across the industry. Companies are currently experimenting with the concept of “continuous manufacturing process, ”[v] which replaces the need to “make things” in discrete, costly, and inefficient batches. Once this approach becomes increasingly popular, fair amounts of operation savings are anticipated.  Moreover, the implications of this resurgence are that companies will experience lessened sensitivity to human labor costs, reduced capital investment and energy costs, and increased invention to production efficiencies.

Although these anticipated shifts signify manufacturing operation advancements, it is essential to maintain a watchful eye on the various components of supply chains that can become disrupted. For example, automation through robotics can remove the human labor force completely, and natural oil and gas while it allows for cheaper energy consumption there are environmental and social costs. Therefore it is necessary for companies and the manufacturing industry as a whole to take stock of the anticipated trade-offs of implementing new technological approaches for operation.  I invite you to chime in. Where should companies draw the line when adopting new manufacturing technologies and approaches?

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[i] The Kitchen Table Industrialists (New York Times, May 13, 2011)

[ii] The 4 Technology Trends That Could Bring Back U.S. Manufacturing (and Innovation) (Fast Company, September 27, 2013)

[iii] The 4 Technology Trends That Could Bring Back U.S. Manufacturing (and

Innovation) (Fast Company, September 27, 2013)

[iv] The 4 Technology Trends That Could Bring Back U.S. Manufacturing (and

Innovation) (Fast Company, September 27, 2013)

[v] The 4 Technology Trends That Could Bring Back U.S. Manufacturing (and

Innovation) (Fast Company, September 27, 2013)