Invest in crappy products to keep manufacturing jobs

There has been a lot of talk lately from officials wanting to bring manufacturing jobs back to the United States from offshore locations. This appears to be from people unfamiliar with manufacturing wanting to provide some hope to people who’s jobs are being eliminated. The problem is these officials are going after manufacturers of great products like Apple when they should be going after the bottom of the barrel companies.

Demand picks up: the first few jobs are lost

As a company starts building products they rely on humans for production capacity. This is because humans can be assigned with ease, are “modular” in nature as they can do various jobs without much downtime for training, and very inexpensive for companies that are in their infancy.

The first few jobs are eliminated by automation as a company matures and their product starts to demand more of their manufacturing facility. Early automation techniques typically take the form of a new rail system or packaging system to increase throughput.

Demand grows: consultants find ways to eliminate humans

Industrial automation consultants are often called in to help at the point when current manufacturing capacity cannot handle the next 12 to 24 months of demand. These men and women focus on increasing throughput per-square-foot, eliminating waste, and maximizing the current factory configuration. Many times they recommend building a new factory while the current factory comes to the end of its life cycle. This is where manufacturing jobs move aside and the specialty systems are erected.

Demand goes through the roof: robots are brought in

When a company gets to the point where they have a known demand cycle, they can plan for various strategies to handle demand. In some cases they aggregate multiple factories into one with robots performing the majority of the jobs. Robots are cheap when you are amortizing them over 10 to 20 years. They don’t get sick, strike, go on vacation, steal, sleep, require parking spots, or require raises. They are the perfect manufacturing employee.

A fully-automated factory is quite a lonely place. Look at the LEGO manufacturing plants around the world to see the starkness. Everything is automated. Everything. There are typically 3 employees per massive facility to help fix the robots and automation systems.

Just look at FoxConn, the company who manufacturers products for Apple. They announced this year that one factory has “reduced employee strength from 110,000 to 50,000 thanks to the introduction of robots.”

Economists have said that automation will put 35% of jobs at risk over the next 20 years.

Solution: invest in less popular products

If there is a need to bring manufacturing jobs back to the United States, we need to focus on those companies with products that are not very popular. The ones that keep the company at a point where automation is too far out of reach.

Then we need to make sure that their products maintain enough sales for the company to stay in business but not enough to have them thinking about automation.

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