1st Edition
Reshore Production Now How to Rebuild Manufacturing and Restore High Wages, High Profits, and National Prosperity in the USA
This book addresses the vital importance of reshoring US manufacturing capability to ensure economic and military security and then discusses the proven methods that the United States used to gain manufacturing supremacy in the first place. The vital takeaway is: If the job can be made sufficiently productive, the per-unit labor cost ceases to be relevant which means a business can pay high wages, realize high profits, and deliver low prices simultaneously. The contest is then not between high wages and cheap labor, but between efficiency and inefficiency and, when automation is involved, machine against machine. Readers will be able to put these principles to work very quickly to achieve tangible results.
The relatively low Federal minimum wage has meanwhile become a major issue, but inflation skyrocketed in the second quarter of 2022 when higher wages, and higher demand for goods and services, were not matched with higher productivity. The book addresses the relationship between the money supply and the velocity of money to prices, wages, and productivity.
A manufacturing resurgence in the United States will not only increase our standard of living enormously but generate taxable economic activity that will help pay down rather than increase the Federal debt. Higher productivity also delivers a greater supply of goods to accompany higher wages, and thus works against inflation. This can prevent looming recessions and disruptions.
Preface
Introduction
Reshoring is a SMART Goal
Content Overview
Chapter 1. Wages, Productivity, and Inflation
Money is Not Value or Utility
Money Debasement, Then and Now
Even Precious Metals Often Lack Genuine Utility
Weimar Wastepaper and Cryptocurrency
Money Supply and Velocity, and the Equation of Exchange
Deficit Spending and Inflation
Productivity Counteracts Inflation and Pays Down the Deficit.
Revenue Must Also Balance Profits and Costs of Production
Waste is Inflationary
We Must Produce Our Way Out of the National Debt
Chapter 2. Loss of Manufacturing Equals National Decline
National Prosperity Comes from Adding Value to Raw Materials
Be at the Top of the Food Chain
Raw Materials are Fleeting; Manufacturing Endures
The Danger of Manufacturing Inferiority
The United States' Response: Lean Manufacturing
Emerson's Twelve Principles
The Leaders of the American Response to Japanese Organization
Industrial Power Equals Military Power
Pre-Agricultural Warfare
Modern Warfare as a Product of Agriculture
The Rise of the Military-Industrial Complex
Lepanto (1571) and the Spanish Armada (1588)
The American Civil War
The First World War
The Second World War
Manufacturing an End to War
Cooperation is Natural, and Conflict is Dysfunctional
War Was Once a Private Affair Between Absolute Monarchs
War in the Industrial Era
Application to National Social Problems
The Collapse of American Shipbuilding and Maritime Commerce
Summary
Chapter 3. The PRC is a Dangerous Geopolitical Rival
The PRC's Threats to American Supply Chains
The Chinese Communists Lobbied Against Legislation to Promote US Chip Manufacture
Counterfeit and Substandard Products
Failure Mode Effects Analysis Perspective
Dangerous Pet Toys and Pet Foods
Counterfeit Fasteners in Aerospace and Construction
Counterfeit PRC Medications Threaten U.S. Supply Chains
Substandard Respirators for Covid-19 Protection
General Supply Chain Risks
Semiconductor and Automotive Supply Chains
Other Supply Chain Problems
Summary
Chapter 4. Cheap Labor is a Dangerous Illusion
Meet the High-Priced Workers
High-Priced Workers and Standards
High-Priced Soldiers are Cheaper than Cheap Soldiers
Gideon and his 300 "High Priced Men"
Cheap Labor is Costly
What About Piece Work?
Can We Compete with PRC Automation?
Near Common Sense versus Supernal Common Sense
Financial Metrics: the Road to Ruin
Be Careful What You Wish; You Might Get It
How Dysfunctional Metrics Brought Down W.T. Grant
Unsaleable Inventory and the Laxian Key
Marginal Revenues, Costs, and Profits, and Sunk Costs
Transfer Pricing Traps
How to Outsource Manufacturing at a Loss
Dysfunctional Purchasing Incentives
Total Cost of Ownership (TCO) and Toyota's Seven Wastes
Waste in Trucking Hurts Drivers and Makes Just-in-Time Impossible
Book Value is Not Real Value
Costs of Foregone Opportunities
Slavery, Robot, and Corvée as Free Labor
Aristotle Predicted that Automation Would Abolish Slavery
The Suez Canal; Late and Overpriced with Free Labor
Automation Eradicates Slavery and Cheap Labor
False Economy of Cheap Equipment and Training
Low Wages Indicate Low Profits and High Prices
Lose the Luddites
Shoe Manufacture: A Case Study
The Ford Motor Company, Early Twenty-First Century
Self-Service Kiosks
Longshoremen versus Bar Code Scanners
Luddism and Mechanical Power
Don't Prove the Luddites Right
Summary
Chapter 5. We Can Do It!
Think Like a Greek
Learning from Hercules
Learn from Everything You Encounter
Break Paradigms and Think Around Problems
Our Legacy from Alexander the Great (and Henry Ford)
When Education is Dangerous
The Basic Principles
Efficiency Makes the Per-Unit Labor Cost Negligible
Friction and Opportunity Costs
Taylor's "Improved" Pig Iron Handling Still Shows Enormous Waste
Gap Analysis
More About Friction
Modern Depictions of Friction
The Value-Adding "Bang!"
Friction, Motion Efficiency, and Standard Work
Interrupted Thread Fasteners
Japanese Disposable Gowns
Fruit Harvesting
Shoveling
Brick Laying and Roofing
Floor Tiles, Sidewalks, and Safety Tape Marking
Standard Work
Standards are Documented
Use the Standard to Identify Improvement Opportunities
Elements of Standard Work
The Job Breakdown Sheet
Opportunity Costs
Textiles and Cotton
Opportunity Costs in Agriculture
Opportunity Costs in Fruit Harvesting
Pay Attention to Materials and Energy
The Material and Energy Balance
Material and Energy Review
Hunt the Coal Thief
Paint Parts, Not Air
Fertilize Crops, Not Groundwater
Baptize Converts, Not Parts
Raise Meat, Not Animals
Dye the Yarn, Not the Water
Sell the Coal Chemicals, Don't Burn Them
Light the Streets, Not the Sky
Ship Product, Not Air
Avoid Wasteful Overhead
Expensive Cities Add Costs
Educate the American Consumer to Buy Value and Not Waste
Don't Buy Indulgences or the Emperor's New Clothes
Extended Warranties
Advertising
Celebrity Endorsements and Brand Names
Cryptocurrencies
Private Versus Public Universities
Summary
Conclusion
Bibliography
Biography
William A. Levinson, P.E., is the principal of Levinson Productivity Systems, P.C. He is an ASQ Fellow, Certified Quality Engineer, Quality Auditor, Quality Manager, Reliability Engineer, and Six Sigma Black Belt. He holds degrees in chemistry and chemical engineering from Penn State and Cornell Universities, and night school degrees in business administration and applied statistics from Union College, and he has given presentations at the ASQ World Conference, TOC World, and other national conferences on productivity and quality.
Levinson is also the author of several books on quality, productivity, and management. Henry Ford's Lean Vision is a comprehensive overview of the lean manufacturing and organizational management methods that Ford employed to achieve unprecedented bottom-line results, and Beyond the Theory of Constraints describes how Ford's elimination of variation from material transfer and processing times allowed him to come close to running a balanced factory at full capacity. Statistical Process Control for Real-World Applications shows what to do when the process doesn't conform to the traditional bell curve assumption.
This book is an incredibly comprehensive analysis of the factors that drive a successful manufacturing economy. Levinson provides insights from pre-historic times to the current competition with China. He understands the importance of companies sourcing based on Total Cost of Ownership (TCO) instead of wage rate or factory price. Our user data shows that about 30% of import from China would be reshored if companies followed this advice and did the math correctly.
-- Harry Moser, President, The Reshoring Initiative (reshorenow.org)
