Made in the USA vs. Made in Asia, and Factory Automation

Do products from American companies or products “Made in the USA.”1 have any real significant advantage in overall quality or reliability today?  What about the quality of products made from components assembled from around the world, including smart phones or automobiles?  Yes, China virtually owns the consumer electronics manufacturing industry, as far as electronics manufacturing goes, and we get high quality products such as the Apple i-phone from there. 

It's good to know that there are still a few American companies who manufacture beloved products that are Made in the USA.  Examples are Kitchen Aid appliances, Air-Stream travel trailers, Lodge cookware, Smith and Wesson firearms and Harley Davidson Motorcycles (made for the US market only). 

Traditionally, products made in the USA have been well designed and have high quality materials, are reliable and have clear how-to-use instructions. This is generally true today, especially when a company intentionally displays "Made in USA" or an American flag in their advertising or shown on the product.

My personal aim is to buy "Made in the USA" whenever possible.  

As our society becomes more connected globaly, things we buy trend more and more to where a single product may have components from various manufacturers from virtually anywhere in the world.  An automobile may have an engine made in Mecxico, a chassis and drive train made in the US, interior trim made in Canada and tires made in Japan.  This is not necessarily a good or a bad thing in terms of the overall quality of the vehicle.  Over all quality of a product depends on the quality of the basic design, the quality of each individual component and the reliability of the assembly process.

Considering that most products require assembly let's look at automated assembly versus hand assembly.  An office chair has many components that are made by machines, parts that are plastic injection molded, parts that are machined on a mill or lathe and maybe sheet metal parts that are stamped and formed. All the parts have to be assembled to make a chair. The assembly can be done manually by hand, or it can  be done efficiently by a robot, maybe.

What does it matter in overall quality if a product is handmade or if it is assembled by a robot? What does the future hold?  This is a favorite topic of mine since it is a key part of my career.  

Currently, in 2019, there is a great contest of technology prowess underway primarily between two major competitors, China and the US.  An article in - titled “THE U.S. IS BEATING CHINA ON THE FACTORY FLOOR. THIS IS WHY.” summarizes the state of factory automation quite well, check out the article here: <factory automation>.  The following is a benefit comparison of automation and manual (or traditional) manufacturing:

Automated Manufacturing Benefits – this includes automation in making and assembling the parts.           

  • When properly programed, robots perform their tasks flawlessly.
  • Robots can work 24/7 without breaks, except for brief interruptions for product change-overs/programing changes, material supply glitches or quarterly maintenance.
  • Automated assembly lines usually have very high product quality levels.
  • Automated assembly lines are fast and can often produce 3X to10X as many products as manual assembly lines over the same time period.
  • Lower total cost to manufacture high volume products.
  • Many lower paying jobs are replaced with higher paying jobs such as robot technicians and systems engineers.

Manual (traditional) Manufacturing Benefits – this includes a broad range of essential machine made parts and manual assembly, being less than full automation.

  • Lower start-up costs (depending on product volume and existing manufacturing equipment)
  • Sometimes preferable (lower total cost) for low volume production runs, especially with new products where demand volume is unknown and manufacturing equipment is limited.
  • May support more low-tech jobs than automation.

Is total factory automation our future?  Elon Musk’s Tesla project aimed to manufacture the world’s first mainstream electric car in a totally automated factory. As of 13 April, 2018, this tweet encapsulates how that endeavor is going.


People love Elon Musk and his famous forward thinking and doing (with significant US Government subsidies) and to Musk's credit, his project is meeting about 13% of the production forecast, and has been an enormous learning experience for many.  See “WHAT TESLA IS TEACHING US ABOUT THE FUTURE OF INDUSTRIAL WORK. By Edward Gorenshteyn, Published April 25, 2018 in PARSABLE <tesla factory>.

Labor is always a factor in defining the ideal and lowest cost manufacturing scenario.  Factory labor costs in the US in January 2019 are approximately $21.90 per hour, much higher than factory labor costs in China at $5.78 per hour.

There is a significant benefit for U.S. companies to manufacture in the U.S. For example, to avoid taxes (foreign national taxes in China), shipping costs in country of origin, faster feedback from the customer base, sea or air shipping costs, plus avoiding customs costs and tariffs when the products arrive in the U.S.

Labor costs around the world go up over time, almost never down. The big trade-off in manufacturing is labor versus automation.  The cost for automation, or buying and implementing robots in manufacturing is going down.  Therefore, as we create smart products and smart factories, anywhere in the world, labor costs may become less relevant over time.

Low energy costs contribute to lean manufacturing and are also a significant factor, especially for potential cost cutting of base maerials such as aluminum, steel and plastic. As the US is for all practical purposes now "energy independent,"  reshoring or bringing manufacuring home may make economic sense for off-shore operations and holds promise of a bright future for the entire manufacturing industry in the US.  With abundant low cost oil and natural gas, The US has yet another strong leg-up in low cost manufacturing compared to Asian manufacturers.

Another valuable benefit of manufacturing in the U.S. is overall lead time for product delivery to the customer.  Domestic delivery such as overnight, second day delivery or even ground delivery is faster and much lower cost than sourcing and expediting products from overseas. And on the other hand, when products are made in the U.S. we can easily ship overseas [export] at reasonable shipping rates, and lead time.  The package and freight delivery system in the U.S. for both domestic and overseas shipping is unparalleled for efficiency and low cost. 

And finally, the key to smart, high-tech manufacturing, state-of-the-art robotics and automation is powerful, miniaturized computers and sensors with advanced, reliable software to run them. In addition, knowledge of advanced manufacturing processes, machine design, control systems design, an educated work force and quality systems are necessary to to build the equipment and incorporate AI (Artificial intelligence) into the manufacturing infrastructure.  Only the US has the unique environment and capability to excel and win in all of these areas.

The World Economic Forum refers to the convergence of the digital and physical technologies on the factory floor as the Fourth Industrial Revolution or Industry 4.0.  Will China win this world contest even though much of their advanced technology has been embezzled2 from US companies? Remember that China is a Communist country and ruled by an iron fisted government with a terrible record of cyber espionoge and human rights abuse.  China's future prosperity may not be as bright as the current leadership predicts, if the people vote for freedom from government.

Ten years ago, I saw the fully automated Hewlett Packard ink cartridge production line in Oregon making over 2.6 million cartridges per week.  Several engineers supported the production line but at the time I saw it in operation, there was no one even watching the line. It ran flawlessly, around the clock, at least within 6 sigma defect control parameters.

I am betting on the the US and the Free Enterprise System, that we will lead the world in this next great industrial revolution. This is our future, if we can keep Socialism at bay.

  1. "Made in the USA."  The official definition as set forth by the Federal Trade Commission (FTC) requires that a product advertised as "Made in the USA" be all or virtually all made in the United States.   This means the product should contain no — or negligible foreign content.
  2. Definition of embezzle: to appropriate something such as property [patented technology] entrusted to one's care fraudulently to one's own use