Like everyone else, I was surprised when Tim Cook—CEO of Apple, the world’s most profitable company—announced that they were investing $100 million to manufacture the new Mac’s in the United States next year. Though he cited corporate responsibility as the primary reason, Apple is just one of a growing number of companies looking for more manufacturing options in the face of rising labor costs in China, increased consumer demand for quality, and a hyper-competitive market for innovative products.
Of course, the primary reason companies like Apple outsourced in the first place was cost. However, as China and surrounding Asian countries became more entrenched in manufacturing, they also grew and developed a workforce with a skill sets and cost models that rendered the U.S. practically irrelevant. Not only was manufacturing in the U.S. too expensive by comparison, the U.S. also lacked a workforce capable of building the electronics devices our consumers fell in love with. To that, Cook’s (and Apple’s) answer is "it's not a matter of bringing it back, but of starting it here.” In short, it’s in their best interest to invest in new manufacturing options because flexibility is a key advantage against a tenuous global economy.
For many businesses, especially makers of electronics, “flexibility” has become a determining factor in the development of new strategic manufacturing processes. That alone has the potential to revolutionize the entire industry. Ultimately, there are several benefits, but the primary drivers are added value and quality control of design. Here’s a quick breakdown:
- Risk mitigation
- Managed capital investments
- Ability to respond to diverse and changing consumer / client demand
- Rapid product and market shifts
- Ability to scale volumes up, down and to the right size for supporting demand
Quality of Design Enables:
- DFx feedback in the iterations of original design leads to standardization (efficiencies)
- Long-term cost-down path through planned iterations
- Ability to increase (and decrease) scale
- Upfront design path for rapid product generations
- Satisfy the “hunger for the next must have feature”
- Incorporate rapid prototyping and lean processes into designs
While there is no set recipe for aligning a product with a manufacturer or manufacturing region, having diverse options allows stronger market and customer support. One clear driver of increased flexibility in manufacturing strategies is investment in thorough design processes. Combined with the right long-term partnerships, design expertise links product value with the dynamic market conditions to support consumer demands.