4 ms·

It's actually the opposite: We're great at speciality, high-tech stuff, but we don't do commodity contract manufacturing as well as China. The good part of this

It's actually the opposite: We're great at speciality, high-tech stuff, but we don't do commodity contract manufacturing as well as China. The good part of this is that the former has far better margins than the latter.

jkot 11y ago
So you are only cheaper on expensive stuff.
- chralieboy 11y ago
  For now, but the trend in the article is related to mass manufacturing. Fracking (lower electricity prices, cheaper oil) helps large steel and aluminum manufacturers. Cheaper raw materials leads to cheaper widgets.
- nickpinkston 11y ago
  Better != Cheaper - We're able to make more profitable manufacturing companies, by cost or performance.
- ghaff 11y ago
  It's not that simple. I was just happening to look at a plastic bucket I was using yesterday and it was manufactured the next town over in Massachusetts, It's probably true that the US tends not to be competitive for cheap goods that don't have a large individual labor component. But it's more than high-margin items.
  - ams6110 11y ago
    Injection molded plastic seems to be one industry that is still viable in the USA (just my observation, it seems common to see plastics factories here). Not sure why this is.
    - starky 11y ago
      Doing tooling in China and then shipping the molds to NA is the common way to do injection moulding in NA. After that injection moulding is so automated that the labour cost to run a machine isn't that high. That said, I've yet to have a NA injection molder beat out the ones we use in Asia.
    - ghaff 11y ago
      Assuming it is in fact the case (and it probably is for larger items at least), it's probably as part of the US-based hydrocarbon refining ecosystem in some way. (The city in question in my comment was also one of the first places to do industrial plastics manufacturing as a way to replace tortoise shell for combs etc.)
geon 11y ago
Someone explained the attraction of China with the complete supply chain. If you need 1k speciality screws now, you can order them from the screw factory next door and have them ready in no time.
- nickpinkston 11y ago
  This is definitely true, but with better information on suppliers + air freight, we're able to ship from China to the US very quickly and most components are tiny, so shipping costs are de minimis. The problem is more that the Chinese market is still highly fragmented and not easily searched without insiders on the ground. Alibaba is just scratching the surface on transparency in global supply chain, but once the market becomes legible, the local supply chain thing won't matter as much.

jkot 11y ago

So you are only cheaper on expensive stuff.

chralieboy 11y ago
For now, but the trend in the article is related to mass manufacturing. Fracking (lower electricity prices, cheaper oil) helps large steel and aluminum manufacturers. Cheaper raw materials leads to cheaper widgets.
nickpinkston 11y ago
Better != Cheaper - We're able to make more profitable manufacturing companies, by cost or performance.
ghaff 11y ago
It's not that simple. I was just happening to look at a plastic bucket I was using yesterday and it was manufactured the next town over in Massachusetts, It's probably true that the US tends not to be competitive for cheap goods that don't have a large individual labor component. But it's more than high-margin items.
- ams6110 11y ago
  Injection molded plastic seems to be one industry that is still viable in the USA (just my observation, it seems common to see plastics factories here). Not sure why this is.
  - starky 11y ago
    Doing tooling in China and then shipping the molds to NA is the common way to do injection moulding in NA. After that injection moulding is so automated that the labour cost to run a machine isn't that high. That said, I've yet to have a NA injection molder beat out the ones we use in Asia.
  - ghaff 11y ago
    Assuming it is in fact the case (and it probably is for larger items at least), it's probably as part of the US-based hydrocarbon refining ecosystem in some way. (The city in question in my comment was also one of the first places to do industrial plastics manufacturing as a way to replace tortoise shell for combs etc.)

geon 11y ago

Someone explained the attraction of China with the complete supply chain. If you need 1k speciality screws now, you can order them from the screw factory next door and have them ready in no time.

nickpinkston 11y ago
This is definitely true, but with better information on suppliers + air freight, we're able to ship from China to the US very quickly and most components are tiny, so shipping costs are de minimis. The problem is more that the Chinese market is still highly fragmented and not easily searched without insiders on the ground. Alibaba is just scratching the surface on transparency in global supply chain, but once the market becomes legible, the local supply chain thing won't matter as much.