5 ms·

Wonder if this could spur local manufacturing again if transportation costs start to out weigh labor / material costs.

pmlnr 6y ago
That would be a good outcome: less transportation means less pollution, plus redundancy in production, which is seriously needed.
- Nasrudith 6y ago
  Not neccessarily for pollution. Efficency increases with larger sizes and that leads to it fulfilling broader areas. Larger manufacturing can afford more sophisticated forms of pollution control even if it is more concentrated.
  - pmlnr 6y ago
    Could afford, not can. The sad truth is that in far asian prudoction, most don't.
- refurb 6y ago
  Scale brings a lot of efficiencies. It can be more efficient and less polluting to sail a ship with 1000 tons of tomatoes from Mexico than have a local farm drive a few crates of tomatoes to the local farmer's market in his 1970 Ford pickup.
jayd16 6y ago
The cost of bootstrapping manufacturing is also probably impacted though.
- wonderwonder 6y ago
  Very much so. Seems like a good time for the federal government to make low cost loans available to those seeking to bring manufacturing back to the US.
adrianmonk 6y ago
Depends on how long it continues. If demand is back to normal in 2 months and it takes 3 months to ramp up your manufacturing, then you'll be too late to get any benefit from this.
- lazide 6y ago
  Even worse, you’ll have blown however many million $ it took to ramp up production.
- sokoloff 6y ago
  It’s not just your manufacturing steps, but you need all your upstream suppliers to also be local. There are reasons well beyond just price for a lot of electronics development to be done in and around Shenzhen.
jkepler 6y ago
Won't 3D printing also spur local manufacturing?
- ravel-bar-foo 6y ago
  At industrial quantities, 3D printing is slow, low-quantity, and imprecise. You can fix one of those axes at the expense of making the others even worse. As an example, I designed a part with micron-scale tolerances. Some 3D printing firms were able to provide it within a week. Others said they could but messed up the tolerances. Milling it out of metal turned out to be faster and more accurate. As another example, I have a dream of making a part with 100 nm tolerances. It turns out there is only one supplier of 3D printers which can do this, and they are in Germany. One company in my country have their device, but a production run for them costs tens of thousands of dollars per part due to the slow printing required by the high precision and their high fixed capital costs. As a result, they mostly get hired to make molds for more traditional manufacturing methods.
deegles 6y ago
Where do you manufacture the manufacturing equipment?
c54 6y ago
This self-balancing effect is a big part of how trade should work according to monetarist economics[0] But for reasons I don't fully understand (possibly Triffin's Dilemma[1]), this hasn't worked for the US. Triffin's explanation basically says it can't work for the global reserve currency issuer because we have to keep exporting our currency to other places (and exporting currency means importing goods and services) [0]https://en.wikipedia.org/wiki/Balance_of_trade#Monetarist_theory https://en.wikipedia.org/wiki/Balance_of_trade#Monetarist_th... [1]https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma
- alert0 6y ago
  I've seen an argument that we have reached the end of benefit from being the global reserve currency and that the US dollar should weaken to balance out trade. We have been a net importer (of goods) for so long, the upper class has reaped the benefits of cheaper goods while the manufacturing class has lost their jobs. China moved away from feeding the system by ceasing US bond purchases and starting the Belt and Road initiative. It seems like we're there and I'm pretty excited about a domestic manufacturing capability. Combining this with low interest rates, a ton of money is exiting the bond market looking for yield. A lot of it is flowing to stocks, decreasing earnings. Overall, I believe it means greater investment availability. It's really the perfect storm for a very prosperous time in the US (expansion!).
  - vidarh 6y ago
    The US has plenty of manufacturing. The manufacturing jobs went. And they are not coming back. If anything, a push to move more manufacturing to the US will drive further automation.
    - alert0 6y ago
      There are multiple chip (Intel, TSMC) fabs under development in Arizona.
      - ddnb 6y ago
starky 6y ago
There are still going to be components that you need that are affected by the worldwide supply chain issues. It might actually be worse if you are bringing in individual components from various places and have to get them all on ships.
jillesvangurp 6y ago
That's what automation is going to accomplish long term. First, wages in e.g. China are no longer as low as they used to be and second you need far less laborers if you automate things. Also you need higher skilled labor, which favors more developed economies. Producing locally, also minimizes time to market and means you can distribute production. E.g. Arrival is doing that in the UK for assembling buses and vans. They don't build giga factories but instead have small, low cost factories that they can setup close to where the demand is. Basically producing close to where the demand is, or close to where the resources you need are (or ideally both), minimizes cost.

That would be a good outcome: less transportation means less pollution, plus redundancy in production, which is seriously needed.

Nasrudith 6y ago
Not neccessarily for pollution. Efficency increases with larger sizes and that leads to it fulfilling broader areas. Larger manufacturing can afford more sophisticated forms of pollution control even if it is more concentrated.
- pmlnr 6y ago
  Could afford, not can. The sad truth is that in far asian prudoction, most don't.
refurb 6y ago
Scale brings a lot of efficiencies. It can be more efficient and less polluting to sail a ship with 1000 tons of tomatoes from Mexico than have a local farm drive a few crates of tomatoes to the local farmer's market in his 1970 Ford pickup.

jayd16 6y ago

The cost of bootstrapping manufacturing is also probably impacted though.

wonderwonder 6y ago
Very much so. Seems like a good time for the federal government to make low cost loans available to those seeking to bring manufacturing back to the US.

adrianmonk 6y ago

Depends on how long it continues. If demand is back to normal in 2 months and it takes 3 months to ramp up your manufacturing, then you'll be too late to get any benefit from this.

lazide 6y ago
Even worse, you’ll have blown however many million $ it took to ramp up production.
sokoloff 6y ago
It’s not just your manufacturing steps, but you need all your upstream suppliers to also be local. There are reasons well beyond just price for a lot of electronics development to be done in and around Shenzhen.

jkepler 6y ago

Won't 3D printing also spur local manufacturing?

ravel-bar-foo 6y ago
At industrial quantities, 3D printing is slow, low-quantity, and imprecise. You can fix one of those axes at the expense of making the others even worse. As an example, I designed a part with micron-scale tolerances. Some 3D printing firms were able to provide it within a week. Others said they could but messed up the tolerances. Milling it out of metal turned out to be faster and more accurate. As another example, I have a dream of making a part with 100 nm tolerances. It turns out there is only one supplier of 3D printers which can do this, and they are in Germany. One company in my country have their device, but a production run for them costs tens of thousands of dollars per part due to the slow printing required by the high precision and their high fixed capital costs. As a result, they mostly get hired to make molds for more traditional manufacturing methods.

deegles 6y ago

Where do you manufacture the manufacturing equipment?

c54 6y ago

This self-balancing effect is a big part of how trade should work according to monetarist economics[0] But for reasons I don't fully understand (possibly Triffin's Dilemma[1]), this hasn't worked for the US. Triffin's explanation basically says it can't work for the global reserve currency issuer because we have to keep exporting our currency to other places (and exporting currency means importing goods and services) [0]https://en.wikipedia.org/wiki/Balance_of_trade#Monetarist_theory https://en.wikipedia.org/wiki/Balance_of_trade#Monetarist_th... [1]https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma

alert0 6y ago
I've seen an argument that we have reached the end of benefit from being the global reserve currency and that the US dollar should weaken to balance out trade. We have been a net importer (of goods) for so long, the upper class has reaped the benefits of cheaper goods while the manufacturing class has lost their jobs. China moved away from feeding the system by ceasing US bond purchases and starting the Belt and Road initiative. It seems like we're there and I'm pretty excited about a domestic manufacturing capability. Combining this with low interest rates, a ton of money is exiting the bond market looking for yield. A lot of it is flowing to stocks, decreasing earnings. Overall, I believe it means greater investment availability. It's really the perfect storm for a very prosperous time in the US (expansion!).
- vidarh 6y ago
  The US has plenty of manufacturing. The manufacturing jobs went. And they are not coming back. If anything, a push to move more manufacturing to the US will drive further automation.
  - alert0 6y ago
    There are multiple chip (Intel, TSMC) fabs under development in Arizona.
    - ddnb 6y ago

starky 6y ago

There are still going to be components that you need that are affected by the worldwide supply chain issues. It might actually be worse if you are bringing in individual components from various places and have to get them all on ships.

jillesvangurp 6y ago

That's what automation is going to accomplish long term. First, wages in e.g. China are no longer as low as they used to be and second you need far less laborers if you automate things. Also you need higher skilled labor, which favors more developed economies. Producing locally, also minimizes time to market and means you can distribute production. E.g. Arrival is doing that in the UK for assembling buses and vans. They don't build giga factories but instead have small, low cost factories that they can setup close to where the demand is. Basically producing close to where the demand is, or close to where the resources you need are (or ideally both), minimizes cost.