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Save Your Factory
by Richard
Schneider
President and CEO
FANUC Robotics America, Inc.
Challenges
facing North American manufacturers have escalated as the
manufacturing industry struggles to stay competitive in the
global marketplace. Labor costs, tax rates, health care
costs, retirement costs, tort costs and pollution abatement
costs are just some of the problems.
Recently, the
following initiatives were outlined by the U.S. Government with
a focus on improving manufacturing competitiveness:
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Reduce taxes
related to manufacturing
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Conduct a
regulatory review
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Lower health
care costs
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Modernize the
U.S. legal system
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Enact energy
legislation
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Establish a
President’s Manufacturing Technology Council
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Ensure an
appropriate focus on innovation and productivity enhancing
technology
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Train
employees
 In reviewing the
U.S. Government’s list, a majority of the initiatives will take
a great number of years to accomplish. The one area where
manufacturers could secure results immediately, while
maintaining control, is the use of innovation and productivity-
enhancing technology. The state of the manufacturing community
has changed. Quality and efficiency have become essential which
has shifted the focus to lean manufacturing and the Six Sigma
process. Automation and robotics are also credited with
improving efficiency and quality.
 Some
manufacturers are concerned that investing in automation and
innovation will displace workers. The fact is if manufacturers
do not innovate and embrace automation, they will leave
themselves open to losing their entire facility, company, or
worse to outsourcing.
Productivity
enhancing technologies such as automation are having as big of
an impact on the economy as last centuries farming technologies.
Agricultural workers constituted more than 38 percent of the
employment in the U.S. in 1900, while today they are about two
percent of the work force, yet we produce more of the world’s
food.
A similar analogy
can be drawn with the U.S. Steel Industry. The number of U.S.
workers employed by the U.S. steel industry dropped by 74
percent from 289,000 to 74,000, while increasing output by 36
percent from 75 million tons to 102 million tons.
In both examples,
the number of workers fell, but productivity climbed. In
manufacturing, the choice has been to outsource work to
countries with low cost labor. The message is clear. We must
make way for advancing technologies or the North American
manufacturing industry is in trouble.
The “Save Your
Factory” campaign encourages North American manufacturing
companies to recognize automation and robotics as more cost
effective and profitable alternatives to off shoring. This can
be done by focusing on innovation.
There are
numerous factors to consider when moving manufacturing
operations overseas including; factory efficiency, inventory
requirements, the strength of our labor force, government
support and stability, supply chain strength and intellectual
property protection, among others. Producing products in other
countries such as China also provide challenges in maintaining
high quality parts. Counterfeiting costs the global automotive
parts industry $12 billion a year; $3 billion of that total is
in the United States.1 In addition, according to the U.S.
Embassy in Beijing, companies investing in the Chinese market
underestimate the market situation, failing to perform risk
assessments and seek council. This allows investors to fall into
bad business deals, resulting in lost investments, and making
doing business in China a risk.
“Save Your
Factory” encourages companies to weigh these unknowns and
investigate opportunities within their current facility to
assist in remaining competitive. All data supports the fact that
through automation, robotics and other lean manufacturing
operations, North America can be cost competitive with countries
like China.
Several factors
that are directly impacted include: quality, efficiency,
increased control and viability. An automated facility
manufactures the highest quality products, enabling
manufacturers to optimize current capital, labor resources,
maintain control of their operations, strengthen North American
manufacturing leadership and retain jobs, all while leading to
significant cost improvements. Industrial robots provide a
number of direct and indirect economic benefits. One robot can
perform the work of three to five people, reducing the cost of
labor. Over the next three decades, 76 million baby boomers will
retire and only 46 million new workers will be available to
replace them.2 The demand for labor will continue and automation
is the answer.
Cost is an
important factor in choosing to move a factory overseas. There
is key evidence that demonstrates automation and robotics can
provide the cost savings companies are looking for without
outsourcing. Lincoln Electric, the worlds’ leading designer and
manufacturer of arc welding products, robotic welding systems,
and plasma and oxyfuel cutting equipment recently worked with a
customer who was considering moving their factory overseas.
Lincoln Electric’s cost analysis of part production in China
versus the cost of automation, found their customer’s manual
process resulted in a cost of 84 cents per part. When they
investigated producing the part in China, it was 30 cents per
part, while investing in robotic welding in the U.S. also cost
30 cents per part.
In addition to
lower costs, automation and robotics provide a variety of
benefits to the manufacturing community including improved
efficiency, better quality, minimized risk and improved control
of operations. Of all the forms of automation, robots prove to
be the most flexible and offer more opportunities for companies
to maintain profitability.
To create a
successful initiative, we are building a coalition of supporters
including automation suppliers and integrators, manufacturing
leaders, associations and government officials. Through our
resources, including the Save Your Factory Web site (www.saveyourfactory.com),
the initiative’s members will continue to spread the message
that keeping manufacturing operations in North America is
critical for North American manufacturers to be competitive in
the world market.
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“Facts” MEMA.
26. Oct.
http://www.mema.org/counter/facts.php
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U.S. Census Bureau
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710
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Volume
15 Issue 1 -
July 2005