Month: October 2011

Our Emerging Energy Independence

For more than five decades, the world’s oil map has centered on the Middle East. No matter what new energy resources were discovered and developed elsewhere, virtually all forecasts indicated that U.S. reliance on Mideast oil supplies was destined to grow. This seemingly irreversible reality has shaped not only U.S. energy policy and economic policy, but also geopolitics and the entire global economy.

But today, what appeared irreversible is being reversed. The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere. The new energy axis runs from Alberta, Canada, down through North Dakota and South Texas, past a major new discovery off the coast of French Guyana to huge offshore oil deposits found near Brazil.

For the United States, these new sources of supply add to energy security in ways that were not anticipated. There is only one world oil market, so the United States — like other countries — will still be vulnerable to disruptions, and the sheer size of the oil resources in the Persian Gulf will continue to make the region strategically important for the world economy. But the new sources closer to home will make our supply system more resilient. For the Western Hemisphere, the shift means that more oil will flow north to south and south to north, rather than east to west. All this demonstrates how innovation is redrawing the map of world oil — and remaking our energy future.

via Oil’s new world order – The Washington Post.

China Bans their “American Idol” Show

Authorities last month had already ordered leading competitor Hunan Satellite to suspend broadcasts of the hugely popular “American Idol” type singing contest “Super Girl,” allegedly for running overtime. Stations were already cutting contest shows in which viewers vote for their favorite contestant, a concept frowned on by party cadres who don’t permit competitive elections or other facets of Western-style democracy.

China’s television watchdog has capped the amount of entertainment programs, including reality TV shows, that satellite channels can broadcast from the start of 2012.Each of the country’s 34 satellite channels will be limited to two such programs each week, said a statement issued Tuesday by the State Administration of Radio, Film and Television SARFT. Under the new directive, a channel can also broadcast a maximum of 90 minutes of content defined as entertainment every day during prime time – 7:30 p.m. to 10 p.m.The decision is the latest move to curb TV shows of “excessive entertainment” and “low taste”, said the statement. Within these brackets are some matchmaker programs, talent contests, talk shows and reality shows. Every channel has also been ordered to create a program that promotes traditional virtues and socialist core values.

via China limits entertainment programs on satellite TV – China.org.cn.

Why Manufacturing is Returning from China

Shipping and logistics adds 17 percent; finding a viable Chinese vendor adds 1 percent; quality issues add 4 percent; travel and communications add 1 percent and “all others” add another 1 percent to the total price of a product manufactured offshore. Some products are simply not good to produce offshore — those made with highly automated precision processes; those that are bulky and heavy; products that require flexible scheduling; and products that undergo many revisions, causing an increase in quality failures.

In a case study comparing costs in the United States and China, Meeker and his MIT colleague Jay Mortenson found that it is cheaper by 8 percent to produce a current design in China. There are substantial savings associated with purchased parts from China that include direct labor (79 percent savings versus U.S. labor rates), indirect labor and salaries (61 percent savings), benefits (75 percent savings), overhead (40 percent savings) and selling, general and administrative (SG&A) (11 percent savings).

When adding logistics to the China price, the cost advantage of producing in China shrinks to 8 percent: $13.85 for a case-study product made in China versus $14.99 in the United States. But when design for manufacturing and assembly (DFMA) software is applied to the same product, the China advantage vanishes. The China cost declines to $9.79 versus the U.S.-made product at $9.47

via The Case Against Shifting Production To China; Hidden Costs And Growing Risks Make U.S. Attractive For Manufacturing. Continue reading “Why Manufacturing is Returning from China”