Fabricators increasingly face two challenges. On one hand is pressure to reduce costs because of competition from low-wage countries. And on the other hand, customers are reducing order sizes and increasing the variety of parts that they order, even including more custom, nonrepeating parts. So how do you deal with low-volume, high-variety production while at the same time reduce your costs?For decades manufacturers have pushed to reduce labor costs. If you can reduce labor content, you can compete with any low-cost country—at least that has been the prevailing assumption. But the reality of U.S. manufacturing doesn't support this notion. When you analyze overall product costs, labor isn't a major player. In some sectors, in fact, labor makes up only about 7 percent of the final product cost. Instead, the element that really dominates U.S. manufacturing costs isn't labor, it's time.
展开▼
