Tomorrow, 4 October, is National Manufacturing Day (MFG Day) — which is celebrated annually on the first Friday in October. The day is set aside to honor those who manufacture goods in the United States. According to the Holidays Calendar website, “National Manufacturing Day was created by an official proclamation from New Jersey Governor Chris Christie in 2012. His proclamation declared that the manufacturing industry was a dynamic part of New Jersey’s economy and integral to the state’s quality of life and economic development. It also proclaimed that manufacturing accounted for more than 254,000 New Jersey jobs and contributed over 39 billion dollars to New Jersey’s GDP. Two years later, in 2014, President Barack Obama declared it a national holiday.”
It should be obvious that domestic manufacturing is important for the United States economy as well as essential for national security. That lesson was made dramatically clear during the Covid-19 pandemic. Manufacturing Day is an initiative of the Manufacturing Institute — the workforce development and education affiliate of the National Association of Manufacturers. The goal of celebrating the day is to empower manufacturers to come together and address their collective challenges and build excitement about manufacturing careers to help their communities and future generations thrive. Toward that end, the Manufacturing Institute encourages thousands of companies and educational institutions around the nation to open their doors to students, parents, educators and community leaders.[1]
The staff at Manufacturing USA notes, “Today’s manufacturing jobs offer high-paying opportunities to work with cutting-edge technologies in a wide range of fast-growing fields. Driven by a renewed investment in U.S. manufacturing innovation, the growth potential of these jobs is high — more than 1.3 million manufacturing jobs have been added to the U.S. economy over the past decade. These jobs require skills that many Americans already have and don’t necessarily need a college or advanced degree to do, making it easier to upgrade to a manufacturing career than you might think.” They list a number of those jobs and job openings on the website.
“Made in America” has become an important mantra for both political parties. And, as I noted above, there is no doubt domestic manufacturing is important for the nation. Manufacturing is a major contributor to the U.S. economy, accounting for 35% of productivity growth and 60% of exports. It also creates jobs, with each manufacturing job creating 7–12 additional jobs in related industries. The fact that domestic manufacturing accounts for 60% of exports demonstrates that global trade also remains an important part of the U.S. economy. Political and business leaders continue their attempts to identify which manufacturing sectors are most critical for the economy and national security. For example, during the pandemic we learned that domestic manufacturing reduced the U.S.’s reliance on other countries for critical supplies like healthcare equipment and medications. But we have to be smart about how to protect essential domestic production so we don’t start disastrous trade wars that negatively affect America’s export business and American consumers. It is also in America’s best interests to maintain strong economic ties with its neighbors and friends.
It is unrealistic to think that everything consumers need can be produced domestically. No country on Earth possesses a large enough workforce nor has the available resources to achieve that kind of self-sufficiency. A few years ago, the staff at Pivot International published a list of pros and cons associated with domestic and international manufacturing.[2] Among the advantages they identified were:
• Easier communication. “When you and your manufacturer speak the same language, you’re less likely to experience challenging, and potentially costly, communication breakdowns.”
• Positive press. “Choosing to manufacture at home can set your company positively apart, and the Made In America stamp can be a valuable marketing tool.”
• Higher labor standards. “Generally speaking, U.S. manufacturers have higher and better-enforced labor standards to protect the well-being of workers.”
• Positive perception. “Because the American public tends to perceive American-made products as being of better quality than products manufactured overseas, they are more willing to pay more for them.”
• Faster fulfillment times. “By going with a domestic manufacturer, there’s a good chance you’ll experience a quicker turnaround time than you would by outsourcing your product overseas.”
• Reduced shipping costs. “Provided your product is intended for the domestic market, you won’t incur the hefty transport costs and customs fees that come with having your product shipped to the U.S. from overseas.”
• Flexible payments options. “While international manufacturers often accept only a few payment methods, and in some cases, require full upfront payment from American companies, domestic manufacturers almost always offer flexible financing terms.”
• Better ability to “mind the shop”. “Businesses that choose a domestic or even local manufacturer are much better able to see firsthand how a facility operates and see how their product is produced.”
• Greater IP security. “The U.S. has some of the strictest intellectual property rights protections in the world, so manufacturing a product domestically may decrease the chances of intellectual property theft.”
They also point out two domestic manufacturing disadvantages. They are:
• Cost-competitiveness. “With few exceptions, costs for domestic manufacturing are significantly higher than costs for international manufacturing. This is because U.S. labor laws mandate minimum wage for workers and cleaner, safer facilities.” It should be noted, however, that cost competitiveness is getting better as workers around the world insist on better wages and working conditions.
• Limited production. “U.S. manufacturers tend to have more limited production capabilities than their international counterparts and often are not set up to produce high volume orders.”
In celebration of National Manufacturing Day, the National Institute of Standards and Technology (NIST) has published a list of events being held around the country over the next several weeks. Motivating our rising generations to get involved in manufacturing is in the best interests of the country. If you are a manufacturer, you might want to investigate how you can get involved in this month-long celebration.
Footnotes
[1] Staff, “Manufacturing Day,” Manufacturing Institute.
[2] Staff, “Pros and Cons: International vs. Domestic Manufacturing,” Pivot International Blog, 1 October 2018.
