US Manufacturing on the Rebound... Upcycle on the Way?

Recently, I sat down with Richard W. Dennis, the President and CEO of Die-Tech, to discuss some recent trends in the manufacturing/metal stamping industries.  Here are 3 of the trends that we discussed.

Trend #1   The Rebound of Manufacturing in North America

Due to the devaluing of the US dollar and the availability of a fairly trained labor force, Mr. Dennis forsees that manufacturing in North America to be on the rise.  Economically, it's simply not making as much sense ($$) for companies in North America to be purchasing their stampings from Europe or China. 

A few years ago, companies may have been getting a better deal.  But now with the transportation costs and lag time, companies seem to be rethinking that strategy.  All they'll need to make up their minds is a nice spike in oil prices... which we can always rely on our friends in the Middle East for that.

Trend #2   LEAN, Mean, Manufacturing Machines

So you would think with the manufacturing making a rebound in the US and North America, that it would equate to more jobs.  Mr.Dennis said he "wouldn't go that far". 

He said, "I think everyone is going to play that real close to the vest... everyone is looking at more efficient ways of doing things... with all the efficency we've made in this country in manufacturing, there is still several levels of improvement that can be done in every industry.  In order to maintain profits and increase margins, I think everybody is forced to take more of a LEAN approach."

His case in point, Die-Tech is doing the work with 34 employees that used to take 60 employees.  Over the last decade, Die-Tech has been able to generate the same amount of revenue with half the workforce.  Mr.Dennis attributes that to Die-Tech's LEAN approach and highly automated process.

During the economic downturn, Die-Tech used that time to continue employee training and in refining their manufacturing and sales process.  While other precision metal stamping firms are shutting their doors, Die-Tech is poised to capitalize on the opportunities ahead.

Trend #3   Shortage of Stampers... Upcycle on the Way?

Due to economic pressure, many metal stamping firms have been under duress for about a decade.  Gross estimates say there were about 5,000 independent metal stamping firms in 1990.  As of today, the best estimates say there are about 2,000 remaining.

Many financial forecasters are predicting a dip in the economy again in 2011.  With another dip, it's very likely that we'll see more companies either close shop or be bought out.  That will leave the door wide open for companies that have positioned themselves to capture the business of the failing companies.  Of course, this is somewhat a speculation at the moment, as other financial forecasters are saying the exact opposite.  Time will tell.  But it's always better to be a few minutes early for your flight and make it... than a few minutes late and miss it.

What do you think about these trends?  Let us know, comment below.