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Gene Ellis

The Insourcing Boom - Charles Fishman - The Atlantic - 0 views

www.theatlantic.com/...309166

insourcing manufacturing industry

shared by Gene Ellis on 26 Jan 14 - No Cached
  • The Insourcing Boom
  • But in 2011, Appliance Park employed not even a tenth of the people it did in its heyday.
  • By 1955, Appliance Park employed 16,000 workers. By the 1960s, the sixth building had been built, the union workforce was turning out 60,000 appliances a week,
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  • On February 10, Appliance Park opened an all-new assembly line in Building 2—largely dormant for 14 years—to make cutting-edge, low-energy water heaters. It was the first new assembly line at Appliance Park in 55 years—and the water heaters it began making had previously been made for GE in a Chinese contract factory.
  • In the 1960s, as the consumer-product world we now live in was booming, the Harvard economist Raymond Vernon laid out his theory of the life cycle of these products,
  • Amana, for instance, introduced the first countertop microwave—the Radarange, made in Amana, Iowa—in 1967, priced at $495. Today you can buy a microwave at Walmart for $49 (the equivalent of a $7 price tag on a 1967 microwave)—and almost all the ones you’ll see there, a variety of brands and models, will have been shipped in from someplace where hourly wages have historically been measured in cents rather than dollars.
  • Even as recently as 2000, a typical Chinese factory worker made 52 cents an hour.
Gene Ellis

The Insourcing Boom - Charles Fishman - The Atlantic - 1 views

www.theatlantic.com/...3

shared by Gene Ellis on 26 Jan 14 - No Cached
  • Both Bowman and Calvaruso knew something about “lean” manufacturing techniques—the style of factory management invented by Toyota whereby everyone has a say in critiquing and improving the way work gets done, with a focus on eliminating waste. Lean management is not a new concept, but outside of car making, it hasn’t caught on widely in the United States. It requires an open, collegial, and relentlessly self-critical mind-set among workers and bosses alike—a mind-set that is hard to create and sustain.
  • If the people who design dishwashers sit at their desks in one building, and the people who sell them to retailers and consumers sit at their desks in another building, and the people who make the dishwashers are in a different country and speak a different language—you never realize that the four screws should disappear, let alone come up with a way they can.
  • Levi Strauss used to have more than 60 domestic blue-jeans plants; today it contracts out work to 16 and owns none, and it’s hard to imagine mass-market clothing factories ever coming back in significant numbers—the work is too basic.
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  • All that said, big factories have a way of creating larger economies around them—they have a “multiplier effect,” in economic parlance
Gene Ellis

The Insourcing Boom - Charles Fishman - The Atlantic - 0 views

www.theatlantic.com/...2

shared by Gene Ellis on 19 Feb 15 - No Cached
  • The magic is in that head: GE has put a small heat pump up there, and the GeoSpring pulls ambient heat from the air to help heat water. As a result, the GeoSpring uses some 60 percent less electricity than a typical water heater. (You can also control it using your iPhone.)
  • The GeoSpring is an innovative product in a mature category
  • We really had zero communications into the assembly line there.”
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  • The team eliminated 1 out of every 5 parts. It cut the cost of the materials by 25 percent.
  • the team cut the work hours necessary to assemble the water heater from 10 hours in China to two hours in Louisville.
  • Time-to-market has also improved, greatly.
  • four weeks on the boat from China and one week dockside to clear customs.
  • Total time from factory to warehouse: 30 minutes.
  • there is an inherent understanding that moves out when you move the manufacturing out. And you never get it back.”
  • At the end of the day, they say, ‘If we were doing this for the U.S. market, we should never have gone to China in the first place.’ ”
  • But the logic of onshoring today goes even further—and is driven, in part, by the newfound impatience of the product cycle itself.
  • Just a few years ago, the design of a new range or refrigerator was assumed to last seven years. Now, says Lou Lenzi, GE’s managers figure no model will be good for more than two or three years.
  • Products that once seemed mature—from stoves to greeting cards—are being reinvigorated with cheap computing technology.
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