Exploring the Synergy of Automation & Onshoring

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Supply Network Guru
Automation and Wages
Jacob   4/11/2014 12:00:47 AM
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“Though domestic manufacturing still cost more than doing the work in some other countries, the use of robotics and automated processes can largely offset the difference, especially when other cost savings of onshoring are taken into account. When all the elements of cost are considered, offshore costs may be only 5-10% lower -- a difference that can be erased with lean manufacturing, better training, and automation”

Frank, can automation to be a permanent solution. I don’t think wages are the only factor to be considered in this scenario. Availability of raw materials, taxing system, logistics and finally marketing the products are important. For example, If 90% of the products are to be exported to Asian market, then its better to move the production facility to any of Asian countries than exporting from US.

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Supply Network Guru
Comparing the automation level
WaqasAltaf   4/10/2014 1:30:21 PM

Automated technologies, no doubt reduce the cost of production and simultaneously improve the quality of the product however, the real benefits of onshoring will only accrue if the automation level is more sophisticated than that of the offshore counterpart.

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Re: Onshoring
HaileyMcK   4/9/2014 7:58:08 PM

I think the industry needs to get beyond pure cost analysis to looking at real value. In some markets, cheaper doesn't get you as far as being better or available sooner than other products. Further labor costs are just a small part of the labor costs. Logistics, increased risk, and other factors can make the "cheap" option much more costly in the long run.

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Supply Network Guru
SP   4/8/2014 1:57:59 PM

Quite agree if the production is fully automatic using robots then onshoring will turn out to be cheaper. It will also have better outputs in terms of consistency but if human intervention is required offshoring will still win from cost perspective.

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