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 North America.

    "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 Trillion. (1)
  • 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 product pipelines.
  • 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 off-shore.

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.