Return of manufacturing in the US

by therider

On my way to work, a news article from my twitter feed brightened up my day. Apparently GE is bringing back appliance manufacturing back to the states. They even set up assembly lines to make some of the key parts.

http://www.theatlantic.com/magazine/print/2012/12/the-insourcing-boom/309166/

Now, this is good news. To me, it never actually made sense to outsource the manufacturing of a complex assembled product. I have been in software industry long enough to know that the idea, design and implementation has to happen in one place for the maximum efficiency. For example, the marketing people, product managers and the engineers should be in the same building for the fastest iteration of a software product. The simpler, standard components can be easily outsourced or can be procured as off-the-shelf parts. I guess when a whole industry jumps on the fad of outsourcing as was the case a few decades ago, many actually didn’t do the math of hidden costs. The most expensive of them is the erosion of skills to build, iterate and innovate in a fast cycle – which is lost when the factory is half a world away.

Great job GE. Maybe now is the time to look at ETFs for the manufacturing industry.

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