In both cases, domestic manufacturing gives the two companies closer ties to their largest market for consumer and high-technology goods, shortening their supply chains and time-to-market. A skilled U.S. workforce also allows the two companies to apply advanced automation technologies that improve their cost structures and elevate product quality.
Bernie Anger, general manager of GE Intelligent Platforms (www.ge-ip.com), sees an “intense appetite” for investments that drive productivity and efficiency. “Companies have moved away from labor arbitrage (seeking the lowest-cost labor) and are now using manufacturing as a competitive advantage.”
GE has been re-shoring most of its appliance manufacturing to Louisville, KY, for example, because that made it possible to reduce the cycle time for delivery of new product designs to retailers and customers.
Since 2008, the company has also opened or is constructing new factories in many states, including Ft. Worth, TX (fuel-efficient locomotives); Auburn, AL (jet engine components); Asheville, NC (ceramic composites for aircraft engines); Ellsville and Batesville, MS (carbon components and fans for jet engines); and a Lean Lab next to its aircraft composites plant in Newark, DE.
Anger says advanced manufacturing and information technologies that connect the entire process with a digital thread that runs from design to manufacturing to packaging to logistics, have made this expansion possible. “The Internet of Things (IoT) is very real, and it has enabled us to bridge the digital and the physical worlds. We can now monitor product performance in use, for example, which allows us to continually improve product designs and digitally enhance the instrumentation within our products,” he says.
GE also leverages the IoT in many of its automation products to help customers improve asset reliability, packaging automation, OEM connections and other facets of manufacturing. “If companies are not thinking about the digital thread and the IoT, they’re going to be at a disadvantage competitively,” Anger emphasizes.
Along with a $1 billion investment in developing its next generation of automation software and hardware, Siemens also has a big stake in U.S. manufacturing. Over the past few years it has built or expanded plants in West Chicago, IL (motor control centers, switchboards, controls and contactors), Mauldin, SC (geared motors), two plants in Charlotte, NC (gas turbines and steam turbine generators), and a major expansion of its Norwood, OH, facility, which makes large motors for key vertical markets such as oil and gas and chemicals.
Raj Batra, president of Siemens Industry Automation Division, agrees that manufacturing in the U.S. is undergoing a fundamental transformation. “The assumption that you can make things there and sell them here has been turned on its head,” he says. “It’s no longer a question of brawn over brains. It’s hard to design products if you don’t understand production. Manufacturing has become knowledge work, and it requires highly skilled workers.”
It will take time for U.S. manufacturers to update their aging technology, adds Batra. “Companies have strong balance sheets, but they’re cautious about investing. Their goal now is to get more productivity out of what they already have, even if their assets are 20 years old. So one of our primary goals has been to help customers extend the life of current assets.”
Siemens is doing that through its recently introduced TIA (Totally Integrated Automation) Portal (www.industry.siemens.com/topics/global/en/tia-portal), a software platform that provides one integrated engineering framework for all automation tasks. The portal gives customers tools to integrate pre-existing data and projects, in order to optimize planning, machine and process procedures.
“Companies are desperate to modernize in order to be competitive,” says Batra. “Design and manufacturing have to be integrated. There’s a lot of scalability in the tools on the TIA Portal, so they work for both large and small manufacturers.”
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