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Focus: Manufacturing

Feature Article from Our Manufacturing Subject Area - See All

From SCDigest's On-Target E-Magazine

- July 28, 2014 -

 
Supply Chain News: How is US Manufacturing Doing Six Years after the Great Recession? (Part 2)

 

Wide Disperity in Fortunes of Different Sectors, even as Overall US Output Finally on Cusp of Exceeding 2007 Levels

 

SCDigest Editorial Staff

Last week, we provided some numbers in chart form on how well US manufacturing has recovered from the Great Recession that started in 2008 and bottomed in mid-summer 2009.

SCDigest Says:

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Having a tougher time is the "hardware" sector, where apparently a lot of the work has gone offshore. Current production levels are just 67% of 2007 levels, and trending down.

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The bottom line: US manufacturing output overall is at last finally on the cusp of at last reaching peak 2007 levels, with an index score of 99.7 versus the 100 for 2007 baseline year. However, the prosperity varies dramatically across industry sectors. (See last's week's story: How is US Manufacturing Doing Six Years after the Great Recession?)

 

Among the industries we looked at last week, below are the current indices (meaning, for example, that output in consumer goods manufacturing is currently 2.78% below its 2007 levels):

 

  • Consumer Goods: 97.22

  • Consumer Durables: 102.6

  • Chemicals: 89.21

  • Computers and Electronics: 150.3

  • Primary Metals: 104.6

  • Furniture: 75.85

 

  • Machinery: 108.95


Below we offer charts for another set of US industry sectors. Note that you can mouse over each chart to see individual data points and also change the time view of the data.

We'll start with automobiles and parts. Most know that the US auto industry in general seems to have recovered nicely, and that's shown in the data, where after having reached a bottom of just 47.6 in June 2009, production is now nicely back over 2007 levels, at 112 and change.

 

 

 

Plastic and rubber parts have seen a long, slow climp from the bottom, but now have come almost all the way back, to a level of 97.7.

 

 

 

Paperboard for packaging and other uses seems like a reasonable proxy to use for overall economic activity. That sector is also close to all the way back, at a level of 97.72 in May (June number was not yet available).

 

 

 


(Manufacturing Article Continued Below)

 

CATEGORY SPONSOR: SOFTEON

Learn More about Softeon's Innovative Supply Chain Solutions

 

 

Not surprisingly, food manufacturing has recovered nicely, now up almost six percent from 2007 levels. While the food supply chain has certainly gone global too in recent years, most US food is still produced right here.

 

 

 

Also a decent story for fabricated metal parts, which also seems to us like a good proxy for the overall economy, and sure enough at a level of 99.59 is pretty close to the number for the overall manufacturing sector.

 

 

 

Having a tougher time is the "hardware" sector, where apparently a lot of the work has gone offshore. Current production levels are just 67% of 2007 levels, and trending down.

 

 

 

 

A much better story in terms of heavy duty truck production, which has soared 54% over 2007, driven in part from changes in environmental regulations that force or encourage carriers to buy new equipment.

 

 

Finally, and most gloomily, the apparel and leather products manufacturing sector in the US has been devastated by offshoring, and not really come back at all. At a level of 59.24, it is 40% below 2007 levels, though it has at least flatlined of late.

 

 

 

What does this all mean? US manufacturing is growing, contrary to some perceptions, and is thriving in some sectors, but going in the other way in many others.


What is your reaction to these manufacturing numbers? What surprised you?
Let us know your thoughts at the Feedback section below.



Recent Feedback

Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.


Srihari
Senior Consultant
Infosys
May, 22 2016

Surprised to see Home Depot fall off the list; thought they were winning with Sync?


Mike O'Brien
Senior editor
Access Intelligence
May, 26 2016

Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.


Julie Leonard
Marketing Director
Inovity
Jun, 27 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 


Carsten Baumann
Strategic Alliance Manager
Schneider Electric
Aug, 19 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".






Jo Ann Tudtud-Navalta
Materials Management Manager
Chong Hua Hospital, Cebu City, Philippines
Aug, 21 2016

U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm


Sandy Montalbano
Consultant
Reshoring Initiative
Aug, 24 2016
 
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