TVs Made in America (again)?

[Midpack]

Just watched a story on NBC Nightly News. Let's hope they're successful!
CES 2012: Element Electronics will make TVs in the U.S.

Quote:

Starting in March, the company will start cranking out TVs from a new flat-screen facility in Detroit, Michigan, making it the only company currently assembling TVs in the United States. While everyone assumes that labor costs here make that prohibitively expensive, Element Electronics is gambling that by shortening the supply chain—the time and cost of bringing fully assembled TVs to the U.S. from China or other offshore factories and suppliers—it can remain cost-competitive while being able to react faster to changing market conditions here in the States.

[Free To Canoe]

Quote:

The company says it can produce larger-sized LCD TVs, including those with LED backlights, here in the States for about the same price as those made in China.

Couple that with some good state relocation incentives and you have a good profit. Thanks for some good news.

[ERD50]

Cool. As some have pointed out, mfg in China is much more than just labor rates - all these various suppliers are close by. It's a whole mfg infrastructure. They will still need to ship the components here for assembly.

But if they can locally source the larger pieces, cabinets and such, I guess they can make it work out. I sure hope so. But in a flat screen TV, there just isn't that much empty space. This will be interesting to follow. Wishing them success.

-ERD50

[TromboneAl]

Quote:

...being able to react faster to changing market conditions here in the States.

Transit time for a container ship from China is 11 days plus 4 days in customs. So they will be able to react 15 days faster. Is that what they mean, and is that really a big advantage?

[ERD50]

I wondered about that transit time also. Doesn't seem like that big a factor.

I wonder if incentives aren't really the major factor.

-ERD50

[Walt34]

That is good news!

One of the predictions made in $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change our Lives for the Better is that China's model of being "manufacturer to the world" collapses because of transportation costs.

Not that I think it will happen suddenly but a bet that fuel prices will trend downward is a bet I would not make. So in the long haul they might make it work. I sure hope so.

[eytonxav]

This is very good news for Detroit and USA. Aside from the cost competitiveness, its nice to have a bit of a feature differentiator as well:

"The JBL by Harmon partnership will result in a co-branded TV line with integrated soundbar-style premium sound systems that use JBL drivers designed to create big sound from smaller speakers, the company says."

[travelover]

Quote:

Starting in March, the company will start cranking out TVs from a new flat-screen facility in Detroit, Michigan

I'm really curious as to whether this really happened. In the metro Detroit area, this kind of a story would have been played up big time - I've heard nothing.

[REWahoo]

Quote:

Originally Posted by travelover I'm really curious as to whether this really happened. In the metro Detroit area, this kind of a story would have been played up big time - I've heard nothing.

Of course it's true - I saw it on the news!

The Daily Nightly - Assembled in America ... a step toward 'made in America'

[omni550]

Quote:

Originally Posted by travelover I'm really curious as to whether this really happened. In the metro Detroit area, this kind of a story would have been played up big time - I've heard nothing.

travelover,

According to this report, they are in Canton, MI and the first year's production is already sold out. TVs assembled in America draw buyers - Video on msnbc.com

Perhaps they are in stealth mode?

omni

[travelover]

Quote:

Originally Posted by omni550 travelover, According to this report, they are in Canton, MI and the first year's production is already sold out. TVs assembled in America draw buyers - Video on msnbc.com Perhaps they are in stealth mode? omni

Thanks, I guess I should quit watching Kim Kardashian videos and watch the news.

[Midpack]

Quote:

Originally Posted by TromboneAl Transit time for a container ship from China is 11 days plus 4 days in customs. So they will be able to react 15 days faster. Is that what they mean, and is that really a big advantage?

Quote:

Originally Posted by ERD50 I wondered about that transit time also. Doesn't seem like that big a factor.

In the industry I left last year, published lead times were 10 days for initial orders and 4 days for change orders. Most customers could get much shorter lead times on an exception basis, and "good" customers routinely gave us only 3-5 days lead time, and occasionally would call and 'want it tomorrow' even though they were 15 hours away for a truck. Our production cycles ranged from 6 to 24 hours depending on product.

And we were a made-to-order business, so we couldn't inventory product for 100+ customers. For a commodity business with inventory (like consumer electronics for sure), I'm sure many of them routinely deal with 1 day lead times.

In manufacturing, 15 days is forever. Customers don't want inventory today (understandably), much too costly...

[ERD50]

Quote:

Originally Posted by Midpack And we were a made-to-order business, so we couldn't inventory product for 100+ customers. For a commodity business with inventory (like consumer electronics for sure), I'm sure many of them routinely deal with 1 day lead times. In manufacturing, 15 days is forever. Customers don't want inventory today (understandably), much too costly...

Certainly makes sense to eliminate the 15 day shipping for a made-to-order business. But for more commodity-like stuff, the question is 'one day lead time from where?'. For the models still made in China, this TV company might have warehouses here in the states, and when Walmart or Target place an order, they can get it to them in a day or two from that warehouse. But it takes 15 days plus to replenish the warehouse.

Most of these components/assemblies are coming from China. The advantage For the Element Electronics is they don't necessarily have 15 days of finished goods inventory in the pipeline, they have 15 days of piece part inventory, so that's a lower carrying cost for them. If they can assemble several different models from those components, they might be able to match demand more efficiently.

It's an advantage, but I'm not sure it's a very large advantage.

-ERD50

[jclarksnakes]

What no Curtis Mathes any more? I think there was a company assembling televisions in Tennessee less than ten years ago.

[jclarksnakes]

I did not need google for something I already knew. My sense of humor may be too subtle for you.

[ziggy29]

Quote:

Originally Posted by ERD50 It's an advantage, but I'm not sure it's a very large advantage.

My thinking is that reducing increased transportation costs due to rising energy prices will ultimately be the main advantage.

[REWahoo]

Quote:

Originally Posted by jclarksnakes What no Curtis Mathes any more?

Trivia time: Curtis Mathes was chairman of the Corporation that bore his name. He died along with 22 others from smoke inhalation in a 1987 Air Canada aircraft accident:

Air Canada Flight 797 the death of George Curtis Mathes Jr

Coincidentally, another couple who died on the plane were from the small town where I grew up. I worked for him as a kid, handing out advertising flyers door to door - something no longer done.

[ERD50]

Quote:

Originally Posted by ziggy29 My thinking is that reducing increased transportation costs due to rising energy prices will ultimately be the main advantage.

Maybe ultimately, but right now they are getting all (almost all?) the parts/assemblies from China. So shipping costs are about the same. And it will take some time to set up local sources for any significant % of those components. China just has huge economies of scale for those things.

Come to think of it, shipping for those assemblies might actually increase costs. I just tore down my old iMac flat-screen computer to take to recycling today (removed the hard drive and mem sticks). Everything fits in there like a hand in glove. If you had to pack all those different assemblies for shipping, it might actually take up more space than the finished product.

But the heaviest/bulkiest parts might be the easiest to source here. Transformers, cabinets, etc. It would make a dent, but a small one I would think.

-ERD50

[TromboneAl]

Quote:

Originally Posted by Midpack In the industry I left last year, published lead times were 10 days for initial orders and 4 days for change orders. Most customers could get much shorter lead times on an exception basis, and "good" customers routinely gave us only 3-5 days lead time, and occasionally would call and 'want it tomorrow' even though they were 15 hours away for a truck. Our production cycles ranged from 6 to 24 hours depending on product. And we were a made-to-order business, so we couldn't inventory product for 100+ customers. For a commodity business with inventory (like consumer electronics for sure), I'm sure many of them routinely deal with 1 day lead times. In manufacturing, 15 days is forever. Customers don't want inventory today (understandably), much too costly...

It depends on what they mean by "...being able to react faster to changing market conditions here in the States." Does it mean react to a sudden increase in the desire for larger buttons on the remote? A big surge in consumer confidence?

For things like that, I wouldn't think that 15 days is significant, and I suspect the reporter was just grasping for something interesting.

[M Paquette]

Quote:

Originally Posted by TromboneAl It depends on what they mean by "...being able to react faster to changing market conditions here in the States." Does it mean react to a sudden increase in the desire for larger buttons on the remote? A big surge in consumer confidence? For things like that, I wouldn't think that 15 days is significant, and I suspect the reporter was just grasping for something interesting.

Yeah, that just seemed goofy.

Where local production really helps is in defect management. Since there is a much smaller inventory of finished goods "in the pipeline", when a problem arises, like a bad batch of capacitors, less product has to be reworked or scrapped, and the rework facility, usually part of the factory, is also where the finished goods are.