Manufacturing in the US is a tough business

Manufacturers are dealt a losing hand in the US.

Manufacturing is impacted by environmental laws, the GAAP is more strict with us, and our valuations are out of line with our contribution to GDP.  All these contribute to US Manufacturing being undervalued, under digitized and underappreciated.

Manufacturing is becoming a lost art in the US.  Environmental protection laws (very good ones) have largely done away with most heavy industry in the US.  Few new forging, casting or plating companies have been founded in the last several decades in the US.  Existing ones are dying out.  As offshoring increases, our ability, skill levels, and machinery’s health are all diminished.

GAAP laws make it harder to make money in manufacturing.  Manufacturers recognize revenue only upon shipment, after all liabilities have been incurred.  When a bank makes a loan, the entire amount of the loan is recognized as revenue.  This makes manufacturing a less attractive investment, and therefore manufacturing companies do not enjoy the valuations that biotech, fintech, and other tech industries do.  As a result, manufacturing does not attract the talent that other industries do.  And that is a shame.

Manufacturing in the US is siloed and under digitized.  Most manufacturers are tied to an industry, a sector of an industry, or even a single customer.  Most manufacturers have to sell through distributorships that were set up back in the 1940’s and 1950’s.  Distribution channels rely on relationships, increasing the barriers to entry and keeping newcomers out.  This leads to a lack of innovation.

HeyScottie was founded to help solve some of these problems.  Too often the manufacturing pot in the US has been seen as an increasingly shrinking pie.  It should not be that way, US Manufacturing is a $8T engine.  The current political climate are leading some US manufacturers to onshore or reshore their builds.  There are many manufacturing centers of excellence in the US.   Additional collaboration, transparency and standardizations can make then all more efficient, globally, financially, and transactionally.  

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