Is Manufacturing Returning to the United States

Posted by Land Link Traffic Systems on Oct 27, 2021 10:17:51 AM

Politicians on both side of the isle support the Biden administrations efforts to revive the U.S. manufacturing base. The American Jobs Plan (AJP) was a proposal by U.S. President Joe Biden to spend $2 trillion on U.S. infrastructure over eight years. It is the second portion of Biden's three-part "Build Back Better" agenda, with the first being the American Rescue Plan and the third being the American Families Plan. It was unveiled shortly after Biden signed into law the Rescue Plan in March 2021. Biden had pitched the proposal as "a transformative effort to overhaul the nation's economy".

The main problem in rebuilding a high-end manufacturing sector in the U.S. is nobody will finance one. Small and medium-size American companies now struggle to borrow the billions of dollars necessary to finance a new factory, especially if those loans take 10 or 20 years to pay out. No amount of investment will return U.S. manufacturing to what it was in 1970. Many of the manufacturers who long served as the economic engines in cities and towns across the Midwest are gone, and they’re not coming back. Nor are the urban factories that once sustained middle-class populations in cities like Cleveland, Chicago and Pittsburgh. Trying to revive them, to rebuild the sector as it used to be, would be a terrible waste of taxpayer dollars.

We can return manufacturing to the U.S, and perhaps entice foreign manufacturing, if we invest heavily in technology, education and training. Yes, it is possible to resurrect our manufacturing base but not in the form we remember.

If President Biden wants to resurrect American manufacturing, he must start with the recognition that the sector has changed. Our approach to manufacturing, warehousing and supply chain processes must evolve as well. We can revive our manufacturing base if we view the project through the lens of technology. The main components will be automation and efficiency.

Preparing Yourself for the Factory of Tomorrow

A Smart Factory usually refers to a highly digitalised and connected environment where systems can use a constant stream of data from connected machinery and equipment to learn and adapt to new demands.

US manufacturing is healthier and in better shape than news headlines and public perception would have it us believe. We’ve revived from the shutdown pretty well but It would be prudent to dispense with the noble idea however, of bringing back traditional assembly-line jobs: They are never coming back, not because Mexico or China, but because robots and automation are taking the place of people on the factory floor.  Robots and machinery which can communicate with each other during all aspects of production, and with AI (Artifical Intelligence ) applications, learn to do it more efficiently each subsequent time.  IOT (The Internet of Things) will coordinate all production equipment to sales and inventory to exactly match production demand.  Inventory levels will be managed in concert with raw material demand.  This paradigm shift will certainly eliminate a significant number of jobs. However, it will also create new opportunities in science, mathematics and technology.

If President Biden wants to resurrect American manufacturing, he must start with the recognition that the sector has changed. Human beings will still be necessary in manufacturing but to work in the factories of the future, they will need a significant increase in the STEM skills ( Science, Technology, Engineering, and Mathematics ) and their aptitude they bring to the job. Today is the time for manufacturers, government, and workers to prepare for the automated and digitalized factory of tomorrow. 

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Michael Gaughan
Technology Officer
Land Link Traffic Systems


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