June 10, 2012      

With Euro financial chaos raging on, China’s industrial engines slowing, and BRIC countries feeling a decided fiscal drag, the U.S., even with its economic rebound still limping along, is looking more and more like a manufacturing renaissance unfolding — ever so slowly.

After a decade of globalization, during which the U.S. witnessed much of its manufacturing pride, prowess and jobs get exported worldwide–making such new-age business jargon as off-shoring, near-shoring and on-shoring become painfully too familiar–now comes yet another new term, only this time it is one filled not with more angst but rather with a sense of renewal: re-shoring.

The curtain begins to rise

U.S. manufacturing is beginning to come home. GE, Boeing, Caterpillar, Ford, Master Lock and Coleman have moved operations back to domestic factories over the last two years, and more could join the trend.

One of the pied pipers leading manufacturing back to its roots from China and other points Far East is none other than that scary, job-stealing hunk of metal, the robot. A nimbler, smarter, modular, multi-tasking-capable generation of robots is on the rise and learning to do all sorts of new tricks principally in manufacturing and supply chains.

Robots are even getting quite adept at toiling side-by-side with their human makers, which has catapulted their kind from the obscurity of punching out automobiles and working in foundries to all sorts of human-robot interaction (HRI).

Many of the new capabilities were on display at this year’s Automatica trade show in Munich, Germany, but even there only the tip of the iceberg of new- and next-gen robotics was exhibited. See: Robots To Drive Era Of New Possibilities

Of course, the robot has lots of help on its side. China’s GDP is expected to grow just over 8% this year, which is the slowest growth China has seen in years.

A report from the Boston Consulting Group (BCG), Made in America, Again: Why Manufacturing Will Return to the U.S., cites other mitigating factors like higher Chinese factory wages, soaring electricity costs, the increasing need to provide goods to a rising Chinese middle class, and the constraints of U.S. firms trying to coordinate operations thousands of miles from home.

The report predicts that by 2015 certain kinds of production will be just as cheap in the U.S. as in China (cited were car parts, construction equipment and appliances).

Greater investment in automation would undercut the chief competitive advantage of manufacturing in China’s low labor costs.

–Boston Consulting Group

The other big plus in a stateside scenario is that the finished goods will be much closer to the ultimate consumer; no longer will they need to take the time-consuming, expensive trek across the Pacific.

In their recent article U.S. Manufacturing Nears the Tipping Point, BCG’s Harold Sirkin, et al, put some heady numbers to the outflow, saying that they have identified industry groups that “account for $200 billion in goods imported from China for which rising costs in China will likely prompt manufacturing of goods consumed in the U.S. to return to the U.S.,” which they go on to say would be like “adding $20 billion to $55 billion in output annually to the domestic economy.”

Throughout the outsourcing movement, roughly from 1997 to 2008, the value of U.S. manufacturing increased by a third, to $1.65 trillion. That was largely due, suggests Gerry Dick of Indiana Business, to the troika of huge investments in information technology, the adoption of new practices like total quality management, lean manufacturing and six sigma; and the use of robotic systems. However, he suggests that human capital is the key element: U.S. worker productivity is what kept it all together.

“Despite China’s rapid rise,” adds Susan Hockfield, president of the Massachusetts Institute of Technology (MIT), “America remains a formidable production power. Its manufacturing output in dollar terms is now about the same as China’s, but it achieves this with only 10% of the workforce deployed by China.”

Line chart comparison U.S. industry

Reshoring & Productivity

Through downsizings, layoffs and economic disaster, American productivity has excelled. Until now.

According to the Labor Department, productivity grew last year [2011] at the slowest pace in nearly a quarter century, after rising sharply in 2010.

USA Today suggested that the “decline in productivity could be good news for job seekers. It could show that companies are struggling to squeeze more output from their workers and must hire to meet rising demand.”

If lagging productivity is melded together with the “reshoring” movement back from China, job seekers could be doubly happy at the employment picture that is slowly coming into focus in front of them.

The net-net for the current U.S. jobs dilemma indicated in Made in America, Again is that domestic employment will rise by 2 million to 3 million new jobs, shaking off one to two points from the dismal U.S. unemployment rate. That’s if, as some suggest, that the new jobs go to humans and not to robots, which has already raised fears with many jobseekers and has been well featured in all sorts of ongoing online, broadcast and print media.

The fears are natural but unfounded, contends Henrik Christiansen , director of the Center for Robotics and Intelligent Machines at Georgia Institute of Technology. He cited the 2011 Metra Martech market research that claims that the robotics industry will create one million new jobs; robots and humans will be manufacturing things “together” for a long time to come.

Workforce development is job one!

Rodney Brooks, founder of both iRobot and, most recently, Heartland Robotics, likens the arrival of robots in the workplace to that of the PC, saying in an Economist interview that, “the PC didn’t get rid of office workers, it changed the tasks.”

Brooks went on to say that if people on the factory floor or in workshops are provided with easy-to-use robots they can become more productive. Bring together these new robots with innovative manufacturing technologies, and you could get a manufacturing renaissance.

Workforce development with robotics

As the PC changed tasks, new skills were necessary to perform those tasks. In short, as with the PC evolution, learning needs to take place for robots and humans to be successful together. Thus, as robots change tasks on the factory floor, factory workers will need to gain expertise in assisting those new tasks.

New learning seems to be at the core of both innovating robotic technology and innovating workers in the workplace.

“A wide array of skills is necessary to develop these robotics systems,” said Jon Bornstein, manager of the Army Research Laboratory’s Robotics Collaborative Technology Alliance, in IEEE’s Today’s Engineer. “Hardware, software, actuation, mobility in complex environments, mechanical engineering, power, control…all of those will be wrapped up in robotics.”

The Economist made the case that, “manufacturing will still need people, if not so many in the factory itself. All these automated machines require someone to service them and tell them what to do. Some machine operators will become machine minders, which often calls for a broader range of skills. Industrial robots are getting better at assembly, but they are expensive and need human experts to set them up (who can cost more than the robot). They have a long way to go before they can replace people in many areas of manufacturing.”

Gerry Dick concurred: “The best equipment and most novel business strategies are useless without workers who can adapt and succeed in a complex, fast-paced environment. Human capital makes the difference.”

But, he quickly notes, “today, half of our manufacturing workers are older than 45, and 8,000 Baby Boomers turn 60 every day across the U.S. Workforce development is job one.”

The tipping point: a new generation of robots

The tipping point for U.S. companies looking homeward again and deciding on a return is automation via a new generation of robots that are hiring on at all sorts of new manufacturing and agricultural venues–places far different from their well-known employment haunts at auto plants.

Robots are now working in such previously robot-less environments as meat processing, furniture making, farming, aircraft production, warehousing and mining–as well as robot-only manufacturing like Canon’s camera facilities. They’re even in households and hospitals, and incredulously, washing heads in beauty salons.

These dexterous, HRI-friendly robots present new possibilities at innovating most any process, and innovative minds are taking them up on it and challenging them with ever more. A human-robot culture is arising because of it; a culture of interaction and familiarity whereby humans will first think robots when seeking an automation solution to manufacturing.

3d printing chair

One of their kind, the 3D printer (a particularly American invention), is already ballyhooed as the next Internet-type juggernaut to change the world; the likes of the Wall Street Journal, New York Times, Forbes, Motley Fool — as well as Jay Leno (who makes auto parts with it in his garage) — are heralding it as robotics’ first mega industry. See: Swamped By Demand, 3D Printers Hit The Market.

Motley Fool has been enthusiastically shouting about 3D printing for some time: “Say Goodbye to ‘Made-In-China’. And say hello to the breakthrough technology that’s launching a 21st-century industrial revolution right here in America.

Business Insider calls it “the next trillion-dollar industry.” Hyperbole? Maybe. Maybe not. The advent of 2D color printers was attended by similar fanfare.

The American renaissance in manufacturing is indeed on the way. When it arrives, it’ll be the first industrial revolution where robots played a decisive role.