Executive Briefings

Software 'Proves' It's Not Cheaper to Manufacture in China Rather Than in U.S.

Harry Moser, former chairman emeritus at Lincolnshire, Ill.-based Agie Charmilles LLC, is stumping the country to argue that it's profitable for manufacturers to stay in the U.S. And he has an invention that he says will prove his point.

The crux of Moser's argument is that if U.S. manufacturers take into consideration the "total cost of ownership" for products made in China but destined to be sold in America -- transportation costs, reject rates, foreign wage inflation, potential intellectual-property theft and other factors -- the United States compares favorably with China and other so-called low-cost countries.

To help quantify his argument, Moser has developed a software tool -- TCO Estimator V.5 -- that compares the costs of manufacturing parts and tools in 17 countries, based on 29 factors (such as freight and wage rates). He says the software can project manufacturing costs five years into the future.

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Harry Moser, former chairman emeritus at Lincolnshire, Ill.-based Agie Charmilles LLC, is stumping the country to argue that it's profitable for manufacturers to stay in the U.S. And he has an invention that he says will prove his point.

The crux of Moser's argument is that if U.S. manufacturers take into consideration the "total cost of ownership" for products made in China but destined to be sold in America -- transportation costs, reject rates, foreign wage inflation, potential intellectual-property theft and other factors -- the United States compares favorably with China and other so-called low-cost countries.

To help quantify his argument, Moser has developed a software tool -- TCO Estimator V.5 -- that compares the costs of manufacturing parts and tools in 17 countries, based on 29 factors (such as freight and wage rates). He says the software can project manufacturing costs five years into the future.

Read Full Article