Blog article by Ray Attiyah, Chief Innovation Officer
Manufacturing in China or using Chinese suppliers is not the bargain it once was. Chinese wages are rising at a rate of about 17% per year and a new study by Boston Consulting Group predicts wage rates in China and the United States will converge in 2015. There’s more to the story than labor costs.
There are changes happening here in the U.S. that are contributing to the decisions more and more companies are making to manufacture a higher volume of products and components on U.S. soil. Productivity in America is going up. Companies that embrace a culture of employee led, continuous improvement are finding that they are driving out waste, improving quality and competing globally. They are also putting more emphasis on innovation.
Our friends at PDI communications in Springboro, Ohio saw this first hand. The changes they made in 2010 in their TV assembly area created capacity for a new production line that was cost competitive with manufacturing anywhere.
Not far away in Enon, Ohio, Seepex is preparing for seven million dollar plant expansion. The expansion will allow Seepex, a worldwide manufacturer of industrial progressive cavity pumps and systems, to increase capacity and add capability as a research and development center of excellence.
Of course, China will always be a force in manufacturing and we recognize savvy business leaders need to evaluate their options very closely and come to their own conclusions about how to best meet their manufacturing and supply chain needs.