Manufacturers: Know Your Costs

Nov. 7, 2008
As more manufacturers start studying their total production costs, they're discovering that bringing the work back to the U.S. makes good business sense.

Today's automation solution providers are working closely with their customers, helping manufacturers achieve their goals of more flexible factories with shorter product lifecycles. Two cases in point: Rockwell Automation and Mazak Corp.

"Our focus is to help our customers succeed through differentiation and value creation," explains Keith Nosbusch, chairman and CEO of Rockwell Automation. Previously, as senior vice president of Rockwell's Control and Information Group, Nosbusch was responsible for launching Logix, the company's control and information platform. "We talked about Logix as a control platform and not a PLC because we wanted to establish a different perception of our capabilities as a company. We wanted to help customers eliminate the need to have separate hardware, separate software, separate training and separate spares in their plant, depending upon their application."

Nosbusch says the introduction of Rockwell Automation's integrated architecture was the next large strategic change. "Customers wanted us to seamlessly augment the control architecture with an information architecture. So now we deliver an integrated control and information architecture, and that is what will take us through the next decade."

Machine tool builders are also developing a strategic direction to facilitate the factory of the future. Brian Papke, president of Mazak Corp., offers his perspective: "First of all consider the growing challenges inherent in future product evolution. As manufacturing proceeds into the future, we anticipate the growing rate of product change to continue, even accelerate."

Brian Papke, president of Mazak Corp., expects to see more and more production work coming back to the U.S. due to new developments in factory automation.Papke sees product design continually moving products toward a new approach to simplicity -- fewer, but more complicated parts. "But the product mix that companies will want to have will be broader. It's certainly not going back to the Model T (one size fits all) kind of production. Instead it will be factories that are designed to produce an ever increasing variety of products." Mazak's internal planning shares that product philosophy.

While planning and projecting a new facility's product mix, don't overlook the most basic question -- concerning where the proposed factory of the future will be located, says Papke. His advice: Know your production costs, and before selecting an offshore site be sure to factor in the logistical costs and supply delays in chasing lower labor rates. Also determine the cost reduction potential of part redesign. (Thorough analysis might reveal an overwhelming advantage of U.S.-based production.)

"The opportunities for manufacturing in North America are quite good, especially if it enables you to manufacture in the market you're serving." Papke says he expects to see more and more work coming back to the U.S. "The enabling factors include the new developments in automation, multi-tasking machine tools and the latest in five-axis technology." He says robot technology is also a factor, either incorporated to the machine tool or integral to the production sequence (see "Before Offshoring, Consider Homegrown Options").

Papke says current economic circumstances are not hindering Mazak's preparations for providing manufacturing solutions for the factories of the future. He sees Mazak's mission as one of designing more product by accelerating new product development and by continuing to emphasize production efficiency. "For Mazak that means having production solutions in the factory that enable a greater product mix involving parts that are more complex."

Papke clearly sees factories of the future inhabited by fewer, but far more productive equipment exhibiting the flexibility to produce a much wider range of parts. In that way Mazak is planning to succeed, in effect, by designing, making and selling fewer machines (of a given type) for its customers' factories of the future.

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