Low Cost Manufacturing in the U.S.

low cost manufacturing softwareThe United States is considered to be the top location for low-cost manufacturing, over China and Mexico, according to a study conducted by Entrada Group.  This will no doubt have broad sweeping effects on peripheral industries like low cost manufacturing software, as manufacturers will be looking to run streamlined operations in the U.S.

“Many companies are making manufacturing investment decisions on the basis of a decades-old worldview that is sorely out of date,” said Harold L. Sirkin, a senior partner at Boston Consulting Group, in a recent report.  “They still see North America and western Europe as high cost and Latin America, eastern Europe, and most of Asia—especially China—as low cost. In reality, there are now high- and low-cost countries in nearly every region of the world.”

Entrada Survey Results

  • 33 percent of overall manufacturers said they consider the U.S. the top location fort low cost manufacturing.
  • 46 percent those who have all manufacturing and back office headquarters in one location favored the U.S. for Low Cost Manufacturing.
  • 23 percent of those with more than one site said the U.S. was the prime locale.

These numbers come as a surprise, but as priorities shift away from minimizing total cost of operations and more toward producing high-quality products manufacturers are looking for skilled labor and lower energy costs.

When considering all the factors that affect the bottom line, including the fact that shale and natural gas reserves in the U.S. are driving energy costs down, the total operating cost in the America might actually be cheaper for some manufacturers.

Cloud computing has also driven down the costs of information technology for many manufacturers with low cost manufacturing solutions that are fast to deploy and easy to use.  Other technologies like mobile computing have broad applications for manufacturers.

“2014 will see an increased focus on mobile commerce and mobile decision-making, and this will have major implications for manufacturers,” said author Adrienne Selko in an article at IndustryWeek.com.

The article Identifies 3 factors of mobility that manufacturers should consider.

  1. All digital touchpoints used by customers will have to be mobile friendly. Mobile-enabled marketing, websites and emails will become an essential part of staying in touch.
  2. Manufacturers will need to extend product marketing to accommodate this trend through use of QR codes and other tags, to link interactive content to help drive sales while the customer is standing in the store.
  3. Find ways to add value to your products by making them accessible and integratable. Look at Phillips’ LED light bulbs that can be controlled via an app and consider how that type of thinking could apply to your product.

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