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Cost Efficiency in Manufacturing

A recent study published by the American Institute for Economic Research ranks Connecticut among the top in states where manufacturing companies have developed its manufacturing efficiencies to the point where there is very little waste left to eliminate.  As a small, independent company based in the state of Connecticut, the Rowley Spring and Stamping Corp. has seen this business culture developing over a number of years.  It has typically become a subject of conversation and training in most organized trade events from the state level down to the smaller independent trade organizations.

For most companies, creating efficiencies, or “becoming lean” was not just another business trend, but a means to compete on a global level.  Over the last 10 to 15 years, implementing programs such as 5S and Kaizens events on a regular basis has helped to lay the foundation for most of the successful companies today, regardless of size or business status.  The Rowley Spring and Stamping Corp. has adapted the use of these principles over the years and has been laying the ground work to enhance the lean principles in our everyday practices.

Our partner, Leannovations, LLC provides the proper direction for us to achieve that next level.  Constant training to help identify waste in our daily duties won’t allow us to accept that there is little waste left to eliminate.  It’s this kind of thinking that helps to back up the findings of this study and helps to show that Connecticut companies are among the most efficient in the United States.

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High Fuel Prices and Manufacturing in the US

We are all experiencing “sticker shock” at our local gas pumps, and when we see the price start to drop and go below $100 a barrel, we begin to fall into a sense of belief that the price will continue to drop further.  Unfortunately, as I read about today’s commodities prices, this doesn’t seem to be the case.

As speculators play the oil market, do expect to see prices fluctuate, but don’t expect to see it return to the same prices of just a few months ago.  The high fuel prices are affecting our everyday lives, but there is one very small positive that is just beginning to surface.  There appears to be a number of companies that are reconsidering or looking to “re-shore” their product lines back to North America from Asia.  Because of the volatility in the fuel pricing and how it’s effecting the transportation costs, some corporations are finding the price tag to ship their product from low cost labor areas to the US, are escalating and eroding profits.

A few years ago, we experienced a spike in fuel prices because of the perceived notion that great shortages will take place as a result of the reduction of oil output at that time.  We saw companies making re-shoring considerations back then, but oil prices leveled off and so did those thoughts.  With this new round of rapidly escalating fuel prices, more and more companies are now thinking about the future cost of transportation and coupled with rising labor costs in some Asian countries, it starting to make more sense to have the manufacturing of some products brought back to the North American region.

Many small and midsized US manufacturing companies who have survived the economic downturn, have learned and implemented programs such as lean and six sigma to streamline their processes in order to keep overall cost to manufacture product down to a minimum and remain competitive in the marketplace.   It was necessary for them to make adjustments and present more value added services to each customer in order to stay in business.  Now with major US corporations looking to re-shore, they‘ll discover many US manufacturers are poised to compete on a global basis.

High fuel prices are certainly putting a dent in most family budgets, but putting more people back to work will help to lessen the burden.

Posted in Fuel Cost, Local manufacturing | 1 Comment