Are you following the Glocalization Trends?

[dcsipo]

I have been reading a bit about this lately. I understand how it works with multinationals, But how does it work for medium and small shops?

Going ‘Glocal’: What The Pandemic Showed Us about the Future of Manufacturing

Barbara Humpton discusses the global and local nature of COVID-19 and how it has affected the future of manufacturing.

milkeninstitute.org

I am in software, so we ship bits for almost no cost. Can test remotely, stuff in the cloud, blah, blah... Not sure how it scales for assemblies and components that need a secure physical shipping infrastructure. If you do additive manufacturing, how do you ensure quality? Say you have a design shop in the US and customers worldwide...many interesting use cases.

dee

 

[Ries]

There was an interesting article today in the NYT about the Finnish tire company Nokian. They had a factory in Finland, and a factory a few hundred miles away in Russia. The Russian plant made 80% of their global production. Its shut now, and will not reopen. Instead, they are going with a Glocal idea- the factory in Finland will continue to supply the nordic countries. A new plant in Dayton Tn came online in 2019, to serve their increasing US business. And now, they are building a new plant in Romania, to serve eastern and southern Europe.
All their eggs in 3 baskets, for now, with more likely in the future. It doesnt pencil out quite as well on paper as ONE big plant in Russia with cheap labor, but its much more resistant to economic, climate, and political change.
I think this is a more and more common thing these days. I was talking to a sub of mine yesterday who does sandblasting and industrial finishes- this year, he has been working on a silicon plant in Washington, to supply chipmakers, an Intel plant in Arizona, shipyards in the USA that are getting jobs that used to go to Korea or China, and water treatment plants across the west. All of which are a response to relying exclusively on one foreign source, and getting screwed. US capacity costs more, but is less susceptible to global messes.
https://www.nytimes.com/2023/07/05/business/economy/nokian-tyres-finland-romania.html

 

[dcsipo]

There are a lot of untapped resources in the western hemisphere. People need to start thinking about local production and figuring out competitiveness, not just based on labor costs.

 

[Seesecurity]

There are a lot of untapped resources in the western hemisphere. People need to start thinking about local production and figuring out competitiveness, not just based on labor costs.

But for that to happen you have to have people thinking farther than their next quarter bonus...

 

[marccongdon]

I have seen an uptick in high for me volume (50-200 parts) work from two smaller local manufacturers who have flat out said they would normally source this overseas but lead times are unreliable. But those are both small/medium sized privately owned businesses.

 

[dcsipo]

I have seen an uptick in high for me volume (50-200 parts) work from two smaller local manufacturers who have flat out said they would normally source this overseas but lead times are unreliable. But those are both small/medium sized privately owned businesses.

Did they say what was the difference in pricing using your shop VS overseas? I am trying to explore how much local production is worth to customers. Are they willing to pay multiples of the price, or is it in the fractional percentage range?

 

[marccongdon]

The backstory on this is I know one of the engineers at the first manufacturer, I did the prototype parts at one off rates and with the full understanding that the production runs would be sent out to a different shop. At the time I was doing this on the side and didn't have the time to run the numbers they were throwing around for production, the sales guy was throwing around numbers in the thousands. 2 years (and a few more one offs) later they approached me about running production with more realistic numbers. I believe I was 3x the cost of the first run of parts they got from overseas and 5x the quote for the second batch of parts that they had been waiting on but never received. I get the feeling they would have paid considerably more in this instance just to get those orders built and shipped but that the price I quoted was sustainable for them in the long run. The second one I got as a reference from the first guys, I quoted high expecting to be talked down and they agreed on the price so I probably could have shot higher there but I'm not sure what the story is on those parts.
Oh and for both of these, the parts are smaller pieces for farming implements, think $200 parts on $15,000 products, I'm sure the allowable markup would change if the parts were closer to the finish products price.

 

[dcsipo]

It appears that the trade war with China is heating up. China just banned US imports of two minerals.

China Restricts Exports of Two Minerals Used in High-Performance Chips

Industry executives see Beijing’s export ban on gallium and germanium as retaliation over chip curbs by the U.S. and others.

www.wsj.com

Interesting development, but experts suggest that it only causes short-term issues, but it further increases the risk for anybody sourcing components or products from China.