Twice this week I heard Colorado based companies proudly say, “We assemble our widgets right here in Colorado.” The first was at a meetup for local manufacturing executives. The second was at a technologist confab. In both cases what the respective companies actually meant, however, was that they do final assembly locally of components and subsystems manufactured in China.
Not that I am against Asian manufacturing–in fact we have spent a lot of time setting up supply chains, production lines and test systems for products being built in Asia. And often this is the right solution, all things considered. But I bristle when I hear about a product built from a China supply chain wrapped in an American flag. For the real challenge for us in America is not really doing final assembly here–there are always reasons to do that–it’s about having a local supply chain. Once the supply chain moves overseas, assembly will follow. This has already happened in many industries–consumer electronics being an obvious example.
A China supply chain is also not always the right choice. The advantages in labor cost can be offset by IP risks, shipping costs, cash flow issues with having inventory on the water. There is also an ROI aspect of the costs associated with setting up and qualifying a China supply chain vs the savings. Still for many businesses it’s the right choice.
But if you want to wrap a flag around your product, then please design it locally, use a local supply chain, and assemble it locally.