Boosting domestic manufacturing won’t be easy, but it’s worth the effort
The sudden shock of global supply chains developing huge gaps and demand cratering has no doubt hurt manufacturing, just as it’s hurt every industry. But long-term, it presents an opportunity for companies to reimagine their operations and revamp domestic manufacturing. Such a thing won’t be easy and will require a lot of time, effort, and collaboration.
“It is imperative that our elected officials recognize that a strong equipment manufacturing industry is key to the future prosperity and long-term competitiveness of the United States,” said Jeff Reed, President and CEO of Reed International and Chair of the Association of Equipment Manufacturers Board of Directors. “A comprehensive national strategy for manufacturing would not only eliminate redundancies and improve efficiencies across the federal government, but would focus all efforts on one single objective: the future of manufacturing in this country.”
That future will undoubtedly be different from projections heading into 2020. If North America is to see a 21st-century domestic manufacturing renaissance, it will take a concerted ground-up effort, not just more local sourcing of raw materials, but in training. Skills that have been lost can’t just be reacquired at a snap. Automation can pick up some of the heavy lifting for repetitive tasks, but highly skilled humans are still needed to perform precision tasks. Successful manufacturers going forward will need cobots and humans working side by side.
Those skilled workers are going to command high salaries. A major reason for offshoring and globalization of manufacturing supply chains has been cheap labor. But as manufacturers around the world have found out, cheaper isn’t better if your supply chain is unreliable.
“Between rising manufacturing costs and the industry’s growing skills gap, not to mention the devastating impact of the COVID-19 pandemic on communities across the country, it is imperative that our elected officials mobilize the full force of the federal government in support of the country’s manufacturing sector,” AEM president Dennis Slater said.
The industry will also need private investment. Startups driving innovations in robotics and other technologies will need capital to be able to scale.
“We just closed on a fresh $1 billion and are actively making new investments in automation,” Lux Capital‘s Shahin Farshchi told Tech Crunch. “COVID-19 revealed that our just-in-time manufacturing and logistics infrastructure cannot react to unexpected change. We expect the best practices of tech companies: rapidly adopting new tools and quickly iterating on their products and processes to become common in the realm of manufacturing and logistics.”
Revitalizing domestic manufacturing will not be an easy task—those jobs didn’t leave overnight and they won’t return overnight either—but shutdowns have given everyone a chance to start fresh. If change is to come, the time to start changing is now.