Save Your Factory ~ Enhancing the Re-Shore Initiative
In 2004, FANUC Robotics started the Save Your Factory initiative. This
program is in place to capture the extremely high number of companies moving
their manufacturing off-shore with the intent to save money. The Save Your
Factory purpose is to educate those companies on the benefits of moving back
to the states. Since labor costs have traditionally been low in other countries,
especially China, North American manufacturers were enticed to take their
business overseas. Now additional costs that companies must consider, such
as an extremely long supply chain, long inventory delays, high shipping costs,
and the growing problem of intellectual property theft especially in China,
has caused many companies to return to the United States. The initiative is
in place to spread the message about the hidden costs and, that through robotics
and automation, manufacturers can remain viable and globally competitive in
"Why Save Your Factory?
High hidden costs associated with importing products such
as high taxes, inventory delays, inability to maintain and monitor inventories,
and intellectual property concerns.
The weakened U.S. dollar makes it costly to import products.
In 2010, U.S. Imports total $2.3 Trillion while U.S. Exports totaled $1.8
Fuel and transportation costs are at an all-time high.
Poor product quality standards in other countries.
Inability to respond to surges in demand by implementing shorter
Renewed patriotism and strength in the Made in America trend.
Low cost real-estate in North America.
As fuel prices continue to rise, manufacturers must consider the effects
of these increases on their bottom line. Manufacturing locally instead of
overseas can cut these costs significantly. In addition to high fuel and transportation
costs, it becomes difficult to monitor quality in products shipped from overseas.
High transportation costs come into play again if damaged or badly manufactured
products must be shipped back to an overseas manufacturer. This does not include
the additional lost transit time. Also, as consumer demand changes manufacturers
look to adapt as quickly as possible. If a manufacturer is looking overseas
to make that change, costs rise due to language barriers, and overseas manufacturers'
long reaction times. Another popular reason to re-shore your factory is to
jump on the Made in America bandwagon. A renewed sense of patriotism in this
country can directly increase product sales, and cut costs. And, as the economy
recovers from the worst real estate crisis in history, there's a great opportunity
to secure low cost real estate in almost every part of the country.
As an added incentive for North American companies to re-shore, new
laws are in place in China for overseas employers and foreign nationals to
contribute to Chinese national health care. This new law has gone into effect
that indicates, “companies could pay roughly 37 percent of monthly income
per employee, and employees in turn could pay 11 percent, representing potentially
hundreds of dollars per month per worker (2)” for health care if you
are a foreign national employer or employee working in China. Added taxes,
along with reports that “net labor costs for manufacturing in China
and the U.S. are expected to converge by around 2015” contributing to
the manufacturing trend of moving factories and workers back to North America
according to the Boston Consulting Group (BCG). In addition, corporations
lose money and their customers grow impatient when they have to wait for products
to arrive from overseas. Long delays and great distances also makes it difficult
to track and correct problems when they arise. The instance of intellectual
property theft, a relatively new concern among manufacturers, can be discovered,
stopped, or even prevented more efficiently on domestic soil.
The BCG reports that “products that require less labor and are
churned out in modest volumes, such as household appliances and construction
equipment, are most likely to shift to U.S. production. (3)” However,
this is an ideal entry point for robotics as they can compete with the high
productivity found overseas. High Speed robots are now available for picking,
packing and assembly applications that were previously done manually and cheaper
off-shore. For example, the FANUC Robotics M-1iA
Robot with iRVision is ideal for high speed,
highly repetitive, pick, place, or assembly operations. Re-shoring your factory
and adding high speed, cost effective robotics, makes sense for the future
of your company and North America. Andrew Thomas writes in an IndustryWeek
forum that “in a globalized economy, however, using robots might be
one of the best ways for U.S. manufacturing jobs to live, thrive, and survive.”(4)
This is because robots allow companies to grow while cutting costs. Robots
allow businesses to remain competitive without off-shoring. When robots that
are available 24/7/365 days a year are introduced into a system, especially
in areas where workers are subjected to hazardous conditions like dust, heat,
extreme cold, etc., workers can be moved to better, more skilled locations.
Workers are happier and less prone to accident or injury, and can be used
to maintain, or program the robots.
High Speed Operations with Robots
Several initiatives are in place to support this effort in addition
to Save Your Factory. Carol Tice reports that, “At the federal level,
the Bring Jobs Back to America Act introduced last summer by Rep. Frank Wolfe
(R-Va.) proposes creating repatriation task forces that would identify opportunities
to move manufacturing back home.(5)” This act could provide tax breaks
for those companies willing to save money by re-shoring on American soil.
In addition, according to the BCG, “flexible work rules and a host of
government incentives are making many states—including Mississippi,
South Carolina, and Alabama—increasingly competitive as low-cost bases
for supplying the U.S. market.”
Most of the followers and supporters of Save Your Factory are equipment
suppliers, system integrators, government representatives, and associations.
FANUC Robotics remains committed to helping manufacturers understand that
industrial robots and automation will combat the economic lure of moving manufacturing
For more information, go to www.saveyourfactory.com and http://www.youtube.com/user/SaveYourFactory.
Let us send you more information. Click here to
be contacted by a FANUC Robotics representative.
(1) U.S. Trade in Goods and Services - Balance of Payments (BOP) Basis., http://www.census.gov/foreign-trade/statistics/historical/gands.pdf, accessed June 15, 2011.
(2) Tberezowsky, "China Imposes Health Care Tax – Is This Enough to Reshore US Manufacturing Operations?" June 1, 2011.
http://agmetalminer.com/2011/06/01/china-imposes-health-care-tax-is-this-enough-to-reshore-us-manufacturing-operations/, accessed June 15, 2011.
(3) "Made in the USA, Again: Manufacturing Is Expected to Return to America as China’s Rising Labor Costs Erase Most Savings from Offshoring."
May 5, 2011. http://www.bcg.com/media/PressReleaseDetails.aspx?id=tcm:12-75973, accessed June 9, 2011.
(4)Thomas, Andrew R. "Robots Save and Create Mfg Jobs." http://forums.industryweek.com/showthread.php?t=22011, accessed June 15, 2011.
(5)Tice, Carol. "Moving Factories Back Home." April 19, 2011. http://corp.americanexpress.com/gcs/insideedge/articles/movingfactories-ct.aspx,
accessed June 15, 2011.