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Sheet Metal Fabricator Invests in Automation to Fight Low Labor Rates
CARY, Ill.—Like many manufacturers across the United States, Chirch Global®Manufacturing is continually challenged by the low labor rates in other countries. But after trying a variety of strategies to maintain its cost competitiveness in the metal fabrication industry, the Illinois-based maker of metal stampings and sheet metal fabrications believes that it has found the real key to leveling the playing field—investing in automated sheet metal fabrication equipment.
"We already have an advantage to compete domestically as we have increased responsiveness and very short lead times," said Jeremy Hahn, customer relations representative at Chirch Global Manufacturing, in a statement. "By eliminating labor from the equation, there's really not a cost advantage for shipping parts overseas."
Many manufacturers have asked their customers to look at the total opportunity cost of manufacturing overseas, with hopes that seeing the big picture would help keep more work in the United States. And as labor rates in China have risen 20 percent over the past four years, manufacturing has begun making its way back to the United States. But wage rates are still substantially lower in China than they are in the U.S., and, according to one recent study, are currently 20% lower in Mexico than in China. Most companies can't afford to wait for declining wage rates to level the playing field, and it was only by eliminating the wage rate altogether that Chirch Global Manufacturing found that it could be most competitive against the competition.
Investing in automation has enabled Chirch Global Manufacturing to "compete against anyone, anywhere in the world, by operating lights out for many fabrication projects," according to the company. After a job is set up, it can run unattended at night, automatically loading material and unloading finished parts. By not physically needing an employee to run these parts, the company has eliminated the labor cost across most of a production run.
Chirch Global Manufacturing (www.ChirchMfg.com) is one of fourteen companies within the Chirch Global Manufacturing Network, a collaborative business model of best-in-class manufacturers that "puts innovation and quality first" while offering a one-stop shop for customers seeking a single source for their manufacturing projects (www.ChirchNetwork.com).
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