Rethinking Manufacturing

Author: Wayne Conrad

Part 1

Emerging nations are continuing to enjoy growth in manufacturing and gains in wages and standard of living.

In contrast, developed nations have seen declines in the wages and standard of living of their middle class as manufacturing jobs have moved offshore and higher-paying positions replaced with lower-paying service work. Meanwhile, developing countries struggle to secure the investment needed to bring manufacturing into their economies so that they can improve their depressed quality of life.

Manufacturing currently provides about 14% of the world’s employment and generates 16% of the wealth. Just as people need food and water, nations need manufacturing to thrive and grow. When a country has a healthy manufacturing sector, wages slowly rise, consumers have more money to spend on goods and services, investments are made in infrastructure, information technology, telecommunications and transportation, and this in turn further increases wages in all sectors. Everyone’s standard of living rises.

I believe that for a nation to maintain a strong middle class and a high standard of living, approximately 20% of the jobs should come from manufacturing.

In the past, small vertically integrated manufacturing operations were common in every town and city. Manufacturing and agriculture formed the economic engine that built the high standard of living and strong middle class of the 1950s through 1970s. As many small enterprises grew, it was common to see them merge into large, monolithic organizations. With that came the aggressive pursuit of lower costs and higher profits, often resulting in large manufacturing entities moving their operations offshore, facilitated by the increasing ease of air travel and trans-world communications. As a result, manufacturing in advanced nations is now a mere shadow of its former glory.

The current lack of small, local manufacturers presents a major challenge for innovators as they have no one with whom to contract or partner, or from whom to seek mentorship and learn. The mentorship that historically contributed to the success of new ventures is now not readily available. Furthermore, substantial financial capital is required to do a manufacturing startup using conventional equipment and technology. This prevents many good ideas from becoming viable products.

I believe that global growth and innovation will be driven by advances in health care, food production and manufacturing. For developed nations to benefit fully, their approach to manufacturing needs to change. Manufacturing opportunities often arise from great ideas, but great ideas also arise from carrying out manufacturing. Manufacturing remains a vital source of inspiration for innovation and competitiveness, laying the foundation for research and development, exports, and productivity growth.

It is my contention that a fundamental shift toward manufacturing is necessary to allow us to build and sustain our economies and enjoy prosperity among the middle class. Establishing a strong manufacturing base in advanced nations promotes innovation and productivity, stimulates growth, increases well-paid employment and reduces poverty. As well, it bolsters the demand for services upon which it relies to operate. New innovations spark additional demand, and local manufacturers have substantial new opportunities to satisfy these needs.

Many items currently manufactured in Asia are produced using older technology and relatively low-cost labour. We cannot compete with Asia and other low-wage economies by simply transplanting the manufacturing back to our shores using existing technology.

We need to embrace innovative new manufacturing techniques, taking advantage of CAD and rapid prototyping to accelerate and cost reduce the product development process. Historically, large monolithic research and development labs required a sizeable group of skilled individuals to develop new ideas and transform them into commercially viable products. This took a long period of time. With the growth of low cost and easy-to-use CAD software, together with affordable and readily available 3D printing, ideas on the back of a napkin can be transformed to a proven prototype, ready for production, in months rather than years. This compressed time period, combined with advances in production equipment and processes, can make local manufacturing financially feasible for both experienced and budding entrepreneurs.

Over the past decade, Omachron has been developing innovative new technologies to enable low-cost, low-energy use, local manufacturing of plastic, metal, ceramic and glass products. Omachron now offers affordable, compact, low-energy-use equipment to enable the competitive production of plastic parts, as well as new processes for making low-cost extrusion dies and injection molds.

Omachron is committed to The Power of Small?. Omachron plastic molding and extrusion equipment can transform virgin plastic resin, or 100% pre and post-consumer plastic waste, into new products using 95% less energy, capital, and floor space versus traditional equipment. Converting waste plastic into valuable products with very little capital or energy is the economic engine to clean up our world and make a profit at the same time. The low financial cost and small footprint enables developed nations to rebuild their manufacturing economies, while emerging nations can continue to growth but with less pollution. Developing countries can advance to emerging status faster.

Neither business leaders nor policy makers can rely on mature technologies to solve our economic and environmental challenges. We need to rethink manufacturing to use less energy and materials to provide an ever-improving quality of life for all. We need to make more with less!

To read this and other articles, visit our Omachron Blog, we post updates regularly.

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