Sunday, February 27, 2011

Wired article on global manufacturing

The latest Wired (19.03) has an interesting article on small to midsize U.S. manufacturers returning production to the U.S.

These days, labor, while an important cost, is often not the critical one to determining where to produce, due to continuing advances in automation and robotics. With China's rising labor costs, currency revaluation and quality control problems, the overall cost of making things in China is getting more expensive. Add in the distance to market and the related travel and shipping costs (still a big factor when moving matter) , producing closer to market is making more sense for many manufacturers.

The article puts this in network terms: the longer and more tenuous the links between the nodes of the global economy, the more fragile the network and prone to problems.

The article isn't on the website yet, but should be in the not too distant future.


3/6/11 update: The article is available online now: Made in America: Small Businesses Buck the Offshoring Trend, by Brendan Koerner.