Peloton and Stan Shih’s Smile
Peloton announced that they were getting out of actually making things. They hope to get rid of all the lowest value activities and mfg is low value.
Chief Supply Chain Officer Andrew Rendich calls it “Partnered Manufacturing”. Many industries use contract manufacturers: aerospace, defense, electronics (called contract manufacturing or CM), energy, medical, food manufacturing, personal care, and automotive.
Figure 2: The Stan Shih Smiling CurveNot sure why you’re smiling
What does that say to manufacturers? It says, “you’re not worth much”. It says, “you do the easy, not-very-valuable stuff and we’ll get all the money because what we do is more valuable”. If you are in Partner Manufacturing, what can you do to keep your value? What can you do to stay out of the trough of the Stan Shih smiling curve? Come to HeyScottie to learn how to get out of the trough.
Another Onshoring Win
The WSJ recently highlighted Inter Parfums, a perfume manufacturer that is shifting contract mfg out of China. It doubled supplier contracts with US companies; ~ 70% of parts come from US suppliers.They are not alone (see our previous newsletter). The pandemic and current geopolitical troubles haveworsened longer-term shifts: rising cost of labor in China, higher tariffs and IP concerns.
Want to get in on the onshoring bandwagon? Visit HeyScottie to learn how.
GoodNews/BadNewsfor US Manufacturing Sector
According to Bloomberg, US Manufacturing is being boosted by an increase in onshoring, reshoring and near shoring. C-level mentions of onshoring during earnings calls have risen 1000% since early 2022. 90% of US executives are either currently moving or planning to move production out of China – with 80% considering bringing some of it back to the US.
Figure 1: Manufacturing PMI lowers to 53
That’s good news, since the latest manufacturing sector report from the Institute for Supply Management showed new orders declined for the first time in 24 months. And that’s bad.
Online Coating Classes
The Missouri S&T Coatings Institute is offering two online courses: “Introduction to the Coating Systems” and “Surface Defects: Elimination from Human and Process Contaminants.” Check them out!
Become A HeyScottie Partner!
Get access to new customers and new revenue channels. Turn excess capacity into new sales. Showcase your manufacturing capabilities –there is no cost, no fees and no subscriptions. Manufacturers are stronger together. To learn moreand to sign up click here!