Manufacturing Professionals Make a Splash

Developing an Impactful Global Strategy Can Be Messy as Machine Builders Decide Where in the World to Manufacture

By Dan Hebert

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August 2010If you make sneakers, soap dishes or snow shovels, it's relatively easy to build in multiple locales. Such products can be built by just about anybody anywhere, even unskilled workers in faraway lands.

But if you're a machine- or robot-builder OEM, distributed manufacturing at multiple sites is much more difficult to execute. Many machines and robots are highly complex and often made-to-order with custom programming and configuration—processes that can't be turned over easily to a plant distant from central engineering.

The big question for many OEMs is whether to do all manufacturing from one central location or to manufacture from multiple locations distributed worldwide. Each approach has its advantages and disadvantages.

Close to the Vest

International Wheel & Tire manufactures tire balancers for the automotive OEM and tire industries at its single plant in Oak Park, Michigan. "Each system is validated and certified and then disassembled and shipped to the customer," explains Kevin Kerwin, IWT vice president and CEO. "In comparison to the overall cost of the balancers, disassembly, shipping and re-assembly are minor."

Peter Brahan, automation team leader at Hypertherm in Hanover, New Hampshire, says shipping is a problem for some of its customers, but not for them. Hypertherm builds plasma cutting machines (Figure 1), which it sells to manufacturing companies and to other machine builders. Its product line includes handheld and mechanized plasma systems and consumables, as well as CNC motion and height controls.

Hypertherm has only one manufacturing plant, located in the U.S., but sells all over the world. "Manufacturing in one location makes it easier to ensure that customers get a product built to the same standards, no matter where they are in the world," says Brahan. "In many cases, the engineering staff is located with the production staff, so customization and problem resolution can happen quickly."

On the other hand, he brings up a point that affects many machine builders and gives those companies one very good reason to build in multiple locations. "Our customers make very heavy equipment," he notes. "It's very costly to ship the product around the world."

For some OEMs, the advantages of centralized manufacturing outweigh shipping costs. "As a general rule, all Motoman robots are manufactured in Yaskawa Electric's facilities in Japan," says Dean Elkins, senior general manager of the Motoman Robotics Division of Yaskawa America. "The robots are built in compliance with electrical and safety regulations imposed by the geopolitical area where they'll be sold. Much greater economies of scale are realized in manufacturing costs and consistency through this method. Manufacturing in one location allows for consistent manufacturing and work instructions. This lowers the cost of quality and decreases the end user's cost of ownership." Elkins does recognize the potential disadvantages of shipping logistics, duties, tax, freight and insurance.

Yaskawa offices around the world integrate the robots into a solution for customers locally. "Yaskawa and Motoman also work with a network of value-add system integrators," explains Elkins. "Given the global expansion of our customer base, it's not uncommon for a system to be engineered in one country and shipped to another."

Intelligrated builds palletizing machines using equipment from robotic suppliers Motoman, Fanuc and Kuka. "Machinery manufacturing and robotic integration are done at our St. Louis plant," says Earl Wohlrab, manager of robotic integration at Intelligrated. "Since we set up, test and demonstrate our equipment before we ship it, we have the on-site resources to quickly make any modifications the customer might require. Single-location manufacturing allows design and manufacturing to work together closely, and it allows us to maintain a much higher focus on our process and quality control."

Pearson Packaging Systems in Spokane, Washington, is an OEM that gained multiple manufacturing locations because of an acquisition. "We have a facility in Chicago as a result of acquiring Goodman Packaging Equipment in 2008," explains Michael Senske, president and CEO. "We moved the manufacturing and assembly functions originally housed in Chicago to our facility in Spokane after the acquisition."

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